Estimating what a project will cost is only half the battle. Controlling those costs during the project and after delivery is equally critical. In this TechRepublic Premium guide, we examine some methods to predict and manage costs.

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  1: Control baseline costs

  Non-discretionary money spent maintaining established IT systems is referred to as baseline costs. These are the “grin and bear it” costs, those required just to keep things going. Baseline costs constitute around 70 percent of all IT spending for the average organization, so this is a good place to start. These costs tend to creep over time due to the addition of new systems, meaning there’s less money available for discretionary project work. Worse yet, this creep gives the appearance that IT costs are rising while the value derived from IT investments stays the same or actually goes down.

  Fortunately, baseline costs can be easily controlled. Renegotiate vendor contracts, reexamine service levels, manage assets effectively, consolidate servers, sunset older applications, maintain a solid enterprise architecture, and practice good project and resource management. By doing so, you can lower the percentage of the IT budget allocated to baseline costs and keep them in line, avoiding problems with opportunity costs. Think of IT projects as an investment portfolio. The idea is to maximize value and appreciation. Baseline costs are food, clothing, and shelter. We have to spend the money, but it doesn’t have to overwhelm the budget.

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TIME SAVED: Crafting this content required 16 hours of dedicated writing, editing, research, and design.