Implementation projects can be a significant draw on internal resources, and the cost of those resources must be included in your TCO. Depending on the size of your project, the complexity of your requirements, your approach to change management, as well as the speed at which you wish to deploy – you can be looking at part-time commitments from key individuals, to a full-time commitment from many people across the organization.
Most organizations identify a set of “Business Process Owners” (or Super Users or Subject Matter Experts) who provide the main point of contact for the partner implementation team. The demands on their time will naturally vary throughout the project. Specific tasks are usually allocated to internal people. For example, data preparation and migration, report writing, system documentation, security set up, and training. You, as a client, are also usually responsible for preparing User Acceptance Testing scripts, and all end-user training. However, it is worth noting that although the train-the-trainer approach is commonly proposed and planned for, it is one area where clients often change their mind. Subsequently, deciding later in the project that they would prefer the partner perform all end-user training.
It is important to have a single person assigned as project or program manager. All but the very small projects benefit greatly from having this as a full-time role. All these internal costs need to be included in your calculations.
Some organizations offer their project participants incentives for success (bonuses) and overtime pay for extra hours worked. If appropriate, add an allowance for these costs. Additionally, organizations often include milestone celebrations and off-site workshops to support their change management efforts.
For distributed organizations, you will also need to plan for additional travel costs including travel time as well as airfares, accommodations, etc.
Most models used by partners to determine resource costs can also provide estimates for your internal team’s commitment. Ask them to provide you with a rough-cut resourcing plan for your team.
A simple way to handle internal resources in your TCO is as follows:
The cost of a $100,000 per annum salaried employee might realistically be close to 2 x their salary. $200,000 divided by available productive hours in a year (say 1760 hours per annum allowing for holidays, vacation, and training time and assuming an 8-hour workday) costs you $113/hour for ‘productive’ capacity. If they are not available for their usual “day job” you may also incur the cost of backfilling their position either by new or temporary hires. Once you start adding up these internal costs, your partner’s consulting rates start to look justified.