Money Pit: The True Cost of a Project
Today, we released Money Pit: The True Cost of a Project. The purpose of this research note is to consider the true cost of a project. This research note also updates the original 2012 The True Cost of a Project white paper. For this report we examine the cost of two similar projects in the Standish database undertaken in two very different environments—a mature institutional environment (Fat) and an agile environment (Lean)—against the true cost, which includes hidden costs. The Standish Group has conducted in-depth research on what makes up a project budget. This report has been greatly influenced by mining the current CHAOS database, which has more than 50,000 project profiles and users surveys of IT Executives on the breakdown of project costs.
This is the outline of the report:
Page 1: Introduction: is where we introduce the cost items and activities that make the cost items and budgets. On this page we have two tables. Table 1 is Activity Inclusion. This is The Standish Group’s opinion of the percentage of time certain activities are included in the project budget. Table 2 is Major PM Activity. This is The Standish Group’s opinion of how much time is spent on common project management activities. We have segmented these activities by agile versus traditional methods.
Page 2: Outlines the common stages of a project and break down the costs by stages. We also introduce Stanmets. On this page we have two tables. Table 3 is Fat and Lean Projects by Stages. The table breaks down the cost into classic stages and looks at actual costs and true costs. Table 4 is Stanmets by Industry Here we provide the average cost per Stanmet by industry.
Page 3: Presents Stage 1 Business Justification, Here we break down the cost of Business Justification by major activity. On page three we have one table. Table 5 is Business Justification Costs. This table breakdown is of the true cost by activity in Stage 1 for the Fat project and the Lean program.
Page 4: Presents Stage 2 requirements and design. Here we break down the cost of requirements and design by major activity. On page four we have one table. Table 6 is Requirements and Design Costs. This table breakdown is of the true cost by activity in Stage 2 for the Fat project and the Lean program.
Page 5: Presents Stage 3 development and testing. Here we break down the cost of development and testing by major activity. On page five we have one table. Table 7 is development and testing Costs. This table breakdown is of the true cost by activity in Stage 3 for the Fat project and the Lean program.
Page 6: Presents Stage 4 implementation and education. Here we break down the cost of implementation and education by major activity. On page six we have one table. Table 8 is implementation and education Costs. This table breakdown is of the true cost by activity in Stage 4 for the Fat project and the Lean program.
Page 7: Presents and segments the project/program into six major activities, A highlight is the cost of meetings. We also compare and contrast the project and program management services. On this page we have two tables. Table 9 is Major Cost Items. The table shows the cost of major project items across all stages of the project. Table 10 is project management cost comparison. This table estimates percentage of actual project management costs across different segments.
Page 8: Presents how Lean executes the project. These is one large progress table showing the flow of projects.
Page 9: is a summary, wrap-up and final conclusions. Money Pit: The True Cost of a Project Report is available to members in our report section of our website Dashboard. Non-members can join in our store.