How much will it cost automation project? To answer this question it is necessary to determine by whom and for what purpose made evaluation. Evaluation of the project runs customers, solutions providers and investors. Assessment is made for:

• decision on whether the project;
• comparison of options to automate the selection process;
• negotiate the cost of the project;
• Planning costs for automation project (budgeting);
• Control actual cost of an automation project.

Approach to the assessment depends on the purpose of evaluation and availability of information. There are several methods for evaluating automation project:

The method of analogy. Evaluation is based on the actual costs of similar projects in enterprises that are similar in size of the business and activity;

The method of approximation. Estimates based on quantitative indicators of the company (eg turnover, profit). The project cost is determined as a percentage of one of the indicators for the selected period using industry statistics. Evaluation can also be done using non-financial indicators such as number of employees, branch offices, workstations.

• The decision-making method. Score is not calculated, as determined by the directive in the budget of the company. Automation project will cost as much as him willing to pay.
• The cost method. Evaluation is based on the cost of individual components of the project (work in analysis, design and implementation, acquisition of hardware and software).

To use the analogy of the method of approximation and required information on contracts, which typically is absent in the client company. Such information have a supplier companies and consulting companies. Often, the stated amount of automation projects are overstated, since supply companies tend not to disclose information about discounts on software and implementation. Use of these methods is justified when drawing up short-list - a preliminary list of information systems, from which the selection. In the case of the approximation method share the cost of IT project in the turnover (income) is higher for small and medium-sized enterprises, in addition, the share of spending is higher in those companies for which information system is the primary means of doing business: banks, insurance companies. If a manufacturing company with a turnover of one hundred million dollars the cost of an automation project can be 1-2% of turnover, then the insurance company with premiums a few million dollars per year cost of the project could reach 5-10%. To use the methods of analogy and approximation of the most important thing - to get reliable and adequate information on the actual costs of similar projects. Estimates based on the number of workstations is effective when data are available for the given information system. The larger the company, the more stable estimate.

The use of decision-making method is especially effective in the implementation of IT projects on their own, because in this case an important opportunity to influence the price of individual components of the project. The main disadvantage of this approach is the risk of underinvestment (surplus funds) automation project. Cost method is based on the automation plan, which includes the structure of work (work breakdown structure, WBS) and resource requirements.

It should be noted that the final evaluation of some components (eg, license information system) can be obtained only after negotiations with suppliers to agree on matters of discounts. The use of cost-based method for automation projects similar to the estimate of conventional design, the differences lie in the area of ​​influence of risks on project cost. The purpose of assessing IT project also determines the time perspective and composition accounted for costs. For comparison, automation options to obtain an estimate of all costs of the project, including the stages of implementation and operation. Necessary to predict the terms and conditions of operation of the system: to calculate TCO (total cost of ownership) in the future, assess the risks of changes in conditions, as well as the risk of stopping the project. When comparing the alternatives to using the full cost of the project, which consists of the development costs and implementation costs and the reduced amount of support and maintenance of information systems (TCO).

Requires special attention account the time factor in automation projects. Price of time - is the cost incurred by the company and lost profit due to the imperfections of the existing information system. It is time to assess the cost of an automation project should begin!

The cost of the automation project consists of the following components:

• requirements analysis to the information system, preparation of tender documentation;
• choice of information system vendors, consultants (tender);
• software (license: information system, database, operating system, software support service);
• technical support (servers, personal station, communication links, network devices, etc.);
• adjustment (revision) information system;
• implementation (user training, data migration, deployment, integration with other applications, testing the business logic).

Expenditures vary in the degree of accuracy possible valuation. Full cost consists of costs for the services of third parties, to purchase equipment and software, as well as the cost of own resources of the organization, in the first place - staff time an organization. An opinion that the performance of work automation project by its own staff leads to lower costs. To obtain an adequate assessment of the cost of the work of employees involved in IT project, you should use no wages, and lost revenue due to non-staff of their duties. As a rough estimate, you can use net income falling on one person, adjusted for the level of the organizational structure. Company-suppliers of information systems at no cost estimate of the cost of automation projects in the tender. To evaluate the methodology used by the implementation of appropriate systems, such techniques are available for SAP/R3, Navision Axapta, Oracle Applications, Scala, and others.

Before signing the contract with the automation project are two prices:

• demand price - how ready the client company to pay for the project;
• the offer price - how many requests for project development company.

On the demand price effect estimate of the effect of the implementation of an automation project, the financial possibilities of the customer, the subjective assessment of costs for works. The offer price depends on the marketing policy of the supplier and the cost of the project. To get an order, digging developer must prove exactly the price of the project, which is willing to pay the contracting company. That is, based on an assessment of the project is an intuitive "feeling for" prescriptive assessment (demand price of the project). A basis for policy-evaluation may be adjusted estimate obtained by the method of approximations or analogies (like that would be my project for the automation was more expensive than its competitor A at 10% but no more than the sum of X) and budgetary approach (we can spend on the automation project worth Y in a given period).

Walker Royce, CEO of Rational Software, confirms the validity of this statement: "In fact, in most cases, cost models are used" by contradiction "(to confirm the stated value), rather than for its intended purpose (to determine the price that would have request). In the software market information systems and database management systems influence the effect observed snob - numerous examples of costly acquisition of information systems for their fame, without regard to real business needs, and, sometimes, without analyzing the real investment opportunities. Market Information Systems is also a market for "lemons", because the characteristics of the information system are not known to the customer prior to its implementation, which enhances the influence of the effect of a snob. The acquisition (the introduction) certified expensive multifunction information system and in fact may improve the company image in counterparties and competitors, lead to an increase in market value (capitalization) of the company. The introduction of this system is associated with increased business transparency and efficiency of management.

Price information is used by managers rather than a functional description. For example, Oracle is perceived by all market participants as the most reliable and productive, SAP/R3 has a reputation as the most full-featured, flexible and customizable. The high cost reinforces that reputation. In case of any new product on the market, its value would be perceived by market participants as information on the functional qualities of the product, specifications, performance and reliability. Price leadership strategy feature for developers, in contrast to the manufacturing and service organizations, is that it is not required to achieve reduction in development costs (a reduction of functionality and other quality characteristics, degradation of service). The reason is the lack (or small quantity) variable costs (the cost of producing copies). The exceptions are the costs associated with customer service and support users. You can make a paradoxical conclusion: the strategy of price leadership in a lesser degree involves the optimization of production costs (and hence the optimization of development processes) rather than differentiation or focus, as the price leadership is achieved either by reducing overall development costs, and cost reduction due to a separate copy for by increasing the number of sales that is due to market leadership. In other words, if a company wants to spend a million dollars on an automation project, the evaluation of the project - one million dollars.

Automation projects are not done once cheaper or faster than planned. But the low estimate - estimate cost less - will not lead to lower costs. There is no universal recipe estimate project costs. But the choice between precision and accuracy must be made in favor of the latter. Proper evaluation includes:

• cost accounting on its own resources not expensive, and profitable (alternative) assessment;
• accounting value of time (needed to compare different versions of automation);
• full account of substantial costs;
• accounting risks;
• account the discounted total cost of ownership (TCO) for the expected life of the system

Assessment of the automation project should be based on the optimal procurement plan. In case of unsuccessful completion of the project (implementation of) all costs of the project are losses. Unlike physical assets, software can not be resold. To reduce the risk of loss should be referred to later stages of the costs, and, above all, to delay the purchase of software licenses to complete the setup and completion of the system. Risk reduction also helps to use a fixed-price contracts. Risk management and evaluation of the project - two parallel interconnected process. Assessment of the automation project requires coordinated the evaluation of costs, and in each case requires the use of special techniques. Must be agreed level of accuracy of cost estimates of various types, risks, as well as the parameters used in the calculations, for example, the timing of implementation and operation of the system. The quality of this estimate depends on the completeness of the accounting major project costs, the risks, as well as the assessment of each component.