15.00 - Producing a Reasonable Estimate of Costs - Teradata Database

Teradata Database Design

Teradata Database
User Guide

Producing a Reasonable Estimate of Costs

Without requirements, it is not possible to estimate the developmental and operational costs of a new database management system. Projects are often terminated by enterprise management because they see costs spiraling out of control. This is as much a problem of psychology as it is an issue of failure to plan.

When a project estimate of X dollars is approved by management, they expect to see IT spend X dollars on the project and no more. When they see costs exceeding initial estimates by an order of magnitude or more, they perceive a project to be a failure even when the system is progressing at a normal rate simply because costs so greatly exceed their expectations. When all parties are aware of what a project is going to cost, the psychological dissonance of budgets is greatly reduced if not eliminated altogether.

Without a requirements analysis, you cannot have any grasp of how much an IT project will cost.