Do-it-yourself may be a great option for home improvement ventures, but for major IT projects, it’s rarely a good idea. Yet few companies can afford to squander large amounts of money on consultants who may not deliver on their promises. The answer? Come up with your own project cost estimate, advises Forrester Research Inc. The first step, Forrester analysts say, is to do what consultants do: Determine the type of work that needs to be done and the level of expertise required to do it. Next, figure out how many people you would deploy, and for how long, if you were to do the job in-house; this should give you an idea of the resources and effort the project requires. Forrester’s own research puts the average blended hourly rate for IT consultants (derived from rates from multiple firms for different types of projects) at $155. The third step is to use this simple formula to generate a preliminary cost estimate: (weeks × hours per week) × (blended hourly rates × number of consultants) = total cost.
Example:
(26 × 40) × ($155 × 10) = $1,612,000