1. Cost estimation
Organized by Guo Xi's group
Cost composition
The cost component of a cost item that may be involved in the project, usually including:
- Infrastructure construction expenditures: purchase expenses such as housing and facilities, office equipment, platform software, and necessary tool software;
- One-time expenses: such as research consulting fees, research fees, management fees, training fees, travel expenses, and other one-time miscellaneous expenses, etc.;
- Operation and maintenance costs: such as equipment rental and regular maintenance costs, regular consumable expenditures, communication costs, personnel wages and bonuses, house rent, maintenance of public facilities and other recurring expenditure items.
Cost Estimation Method
- Empirical estimation (analogous estimation): top-down estimation, which is carried out when there is insufficient information at the initial stage of the project. Only an approximate estimated value can be given, which cannot meet the requirements of the project.
- Parametric Estimation: Modeling techniques Statistical techniques to estimate project costs using models. Generally, the basic relationship between scale and cost needs to be described on the graph, and an approximate value can be obtained in the end.
- Comprehensive estimation based on WBS: Break down the work of the project, estimate the cost of the work package, and accumulate the results. The process is:
- Make a complete qualification of the project requirements
- Specify the logical steps necessary to complete a task
- Prepare WBS table
Estimated Dimensions
- project size
- Technical solutions
- Equipment scheme
- Engineering plan
- Project implementation progress
How to draw WBS table
Draw a workflow diagram, treat each activity as a work task, and describe the division of labor tasks on this basis.
The whole process of cost estimation
① Detailed cost estimates for each WBS element. There should also be a cost summary table for each sub-work and sub-task, as well as a cumulative report for the project and the entire plan.
②The planned man-hour curve of each department. If departmental hours curves contain "peaks" and "troughs," consider making some changes to the schedule to achieve hour balance.
③Summary of monthly working hours and expenses. So that when the project cost must be reduced, the project leader can use this table and the man-hour curve to conduct a trade-off study.
④ yearly expense distribution table. This table is divided by WBS elements, indicating the annual (or quarterly) required expenses. This table is essentially a summary of project cash flows for each activity.
⑤ Raw material and expenditure forecast, which shows the supplier's delivery time, payment method, commitment and cash flow for raw material payment.
evaluate
Using this method to estimate costs requires a lot of calculations and a large workload, so only the calculation itself will take a certain amount of time and cost. However, the accuracy of this method is relatively high, and these reports made by this method are not only the expression of cost estimation, but also can be used as the basis for project control. Top management can use these reports to select and approve projects and assess project priorities.
Three methods of cost estimation have been introduced above. In addition, several methods can be used in combination in practice. For example, the main part of the project is estimated in detail, and other parts are estimated based on past experience or by factor estimation.
2. Economic benefit estimation
Category 1
- direct income
- indirect benefits
- Unquantifiable income
Category 2
- short term gain
- long term gain
- hidden income
comprehensive
The direct cash income from project technology development, the expected total sales revenue of new products in the life cycle, technology accumulation, improvement and support for the company's business and product lines, opening up new markets and profit growth points, and entry are expected to bring higher returns new markets, improve customer satisfaction and loyalty, combat competitors to seize market share, obtain new information capabilities to improve the business or management structure, etc.
official
Profit = Revenue - Cost
step:
-
Determine the type of software
Determine whether the software is commercial or non-profit. If it is commercial software, which industry is it classified into? If it is non-profit software, the degree of social response is the main benefit, regardless of economic profit. -
Estimating software hardware cost
According to the three methods of cost estimation, conduct preliminary, in-depth and dynamic estimation to obtain comprehensive cost. (Comprehensive estimation according to the software life cycle) -
Determine the main income of the software
Determine the main source, consider the direct income and indirect income from each subject, and make comprehensive statistics.3.1 One-time income
- Reduction in spending. Including cost reductions resulting from improved system operations, such as reductions in resource requirements, improvements in operational efficiency, improvements in data entry, storage, and recovery techniques, monitoring of system performance, software conversion and optimization, and improvements in data compression techniques Adoption, centralization and distribution of processing, etc.;
- increase in value. Including the benefits caused by the increase of the use value of an application system, such as the improvement of resource utilization, the improvement of management and operation efficiency and the reduction of error rate, etc.;
-
other. Such as income recovered from the sale of redundant equipment, etc.
3.2 Non-one-off benefits
The monthly and annualized benefits in RMB, including reductions in expenses, resulting from operating the proposed system throughout the life of the system.
-
-
Calculation of hidden benefits
Improve the company's image, improve the efficiency of the company's personnel, etc. Refers to the benefits that cannot be directly expressed in RMB, such as the improvement of services, the reduction of risks caused by operational errors, the improvement of information control, and the improvement of the image of the organization to the outside world. Some elusive benefits can only be approximated or estimated at extremes (best and worst-case estimates). -
Improve the model
Establish a model, improve the empirical formula, calculate the comprehensive economic benefit and conduct further analysis on several indicators of the benefit analysis, such as analysis:
- Profit/investment ratio: the profit/investment ratio of the entire system life cycle after the software project is implemented;
- Payback period: the time when the cumulative amount of benefits begins to exceed the cumulative amount of expenditures;
- Sensitivity analysis: analysis of some key factors in the project, such as system life cycle length, system workload, workload type, processing speed, equipment and software configuration and other factors change or make a reasonable combination, the cost and The effects of gains are most sensitive to range estimates. Usually, when a project needs to make trade-offs and adjustments between different factors, it is necessary to refer to the content of sensitivity analysis.