IT Project management Cost of software Defects When defect is detected Typical Cost of Correction User requirements $100-$1000 Coding/Unit Testing S1.000 or more System testing $7.00-8,00 Acceptance testing 100091000 After Implementation Up to millions of dollars It is important to spend money up-front on IT projects to avoid spending a lot more later Project Cost Management
Project Cost Management 11 Cost of Software Defects When Defect is Detected Typical Cost of Correction User Requirements $100-$1,000 Coding/Unit Testing $1,000 or more System Testing $7,000 - $8,000 Acceptance Testing $1,000 - $100,000 After Implementation Up to millions of dollars It is important to spend money up-front on IT projects to avoid spending a lot more later. IT Project Management
IT Project management Basic principles of cost management ( 2) Cash flow analysis(现金流分析) a is determining the estimated annual costs and benefits for a project Internal rate of return(IRR)(内部收益 率) a Is the discount rate that makes net present value equal to zero It is also called the time-adjusted rate of return Project Cost Management
Project Cost Management 12 Basic Principles of Cost Management (2) ◼ Cash flow analysis（现金流分析） ◼ is determining the estimated annual costs and benefits for a project ◼ Internal rate of return (IRR) （内部收益 率） ◼ Is the discount rate that makes net present value equal to zero. ◼ It is also called the time-adjusted rate of return. IT Project Management
IT rojsek management Basic principles of cost management (3) Sunk cost Is money that has been spent in the past a Consider it gone like a sunken ship that can never be returned The rule is -when deciding what project to invest in or continue, you should not include sunk costs Project Cost Management 13
Project Cost Management 13 Basic Principles of Cost Management (3) ◼ Sunk cost ◼ Is money that has been spent in the past. ◼ Consider it gone, like a sunken ship that can never be returned. ◼ The rule is – when deciding what project to invest in or continue, you should not include sunk costs IT Project Management
IT rojsek management Basic principles of cost management (4) Tangible costs or benefits(有形成本或收 益) Costs or benefits that can be easily measured in dollars Like training cost Project Cost Management
Project Cost Management 14 Basic Principles of Cost Management (4) ◼ Tangible costs or benefits（有形成本或收 益） ◼ Costs or benefits that can be easily measured in dollars ◼ Like training cost IT Project Management
IT rojsek management Basic principles of cost management (5) Intangible costs or benefits(无形成本或 收益) a Costs or benefits that are difficult to measure in monetary terms Like out of personal interest, spent some time using home computers, books, and other resources to research areas related to the project Project Cost Management 15
Project Cost Management 15 Basic Principles of Cost Management (5) ◼ Intangible costs or benefits （无形成本或 收益） ◼ Costs or benefits that are difficult to measure in monetary terms ◼ Like out of personal interest, spent some time using home computers, books, and other resources to research areas related to the project IT Project Management