Why Can’t IT Tell Me What a Project Will Cost?


Are IT and business people from different planets? IT project leader Ryan McClish and his business counterpart Kenton Bohn take time to work through their issues and get their teams on the same page.


Companies are becoming more dependent on their IT departments to not only process project request offers, but also be a strategic partner in developing complex, financially sound plans to achieve specific business outcomes. That said, why is IT so hesitant to tell the business what something will cost?

IT projects commonly run over budget and over time.

When the business asks about cost, they are either requesting a simple rough order of magnitude or building a business case with costs and ROI.

From growing competitive advantage to improving operational efficiencies, software is playing an increasingly critical role in business. Companies are becoming more dependent on their IT departments to not only process project request offers, but also be a strategic partner in developing complex, financially sound plans to achieve specific business outcomes. That said, why is IT so hesitant to tell the business what something will cost?

Is it because IT people and business people might be from different planets?

The Situation

Due to changes in some local and federal laws, Kenton needs to add new functionality to his time and attendance application. Because overtime regulations changed for a number of states, in order for Kenton’s customers to stay compliant in 2015, he needs IT to add new settings and a calculation engine to handle the changes. When Kenton approaches Ryan, he is trying to establish a budget to implement the new changes.

The Face-Off

Kenton: Hey, Ryan, do you have a few minutes to talk about my time and attendance product?

Ryan: Sure, what’s up?

Kenton: We need to add some new options for how employees are configured for overtime. We’ll probably also need to modify the calculation engine to incorporate some new rules.

Ryan: OK. Do you know what the new rules are?

Kenton: Yeah, there are three main ones: Working more than forty hours in a week is time and a half, and more than sixty in a week is double time. Then, we’ll need to add that working a sixth day or beyond in a row is double time. The last one is that working more than eighty hours in a two-week period is time and a half.

Ryan: That doesn’t seem too bad. When do we need this?

Kenton: We want it to be available for our clients starting the first of the year. It sounds like that’s something you would be able to do, correct?

Ryan: I don’t see why not.

Kenton: Great. Can you also let me know what this is going to cost us?

Ryan: Sure, once we get the detailed requirements, I’ll have the team estimate it. Then we can get the numbers for you.

Kenton: No, I need something today. Can you just give me a rough idea?

Ryan: Well, that all depends. There are a lot of things that could affect the cost of this. I don’t how complicated it will be to integrate the changes. We need to flesh out the screens that will be affected, and I need to know specifically what we are adding to those screens. These new rules might conflict with existing rules, so we’ll have to discuss how to handle those situations.

Kenton: I know how this goes. You say you want one thing, but once you get the budget, you slip other things in there. The last time we did this, I worked my team to death. Once we get the details from you, we’ll let you know what it will cost to build it.

Kenton, thinking to himself: Why do you have to make it so complicated? It seems like you’re working against me. I just need a dang estimate so I can assess the business impact. I don’t even care if you pad it!

Ryan, thinking to himself: You don’t even know what you want, so how can I? Plus, what little you do know will change along the way, so I’m sure to be wrong. I don’t want to commit to a budget! You’re forcing me to walk the career plank.

Does this sound familiar? Has a business sponsor ever asked you to estimate a “simple” change?

When you find yourself in this position, try working collaboratively with your business sponsor to understand the business need so you can align on features and approaches quickly. As a good business partner, you may need to provide budget guidance long before you can do a bottom-up estimate. Communicate the precision (or lack thereof) of your estimate, and communicate as clearly as you can the things that could affect it. Offer ideas on how you both can manage the things that could make the budget balloon.

The Resolution

Kenton: Ryan, I’m not asking you to make a budget commitment yet. How can I get an initial figure for planning without causing you stress or setting you up to look bad?

Ryan: Great question! Can we start with the really high-level objective?

Kenton: Absolutely. Some new regulations are rolling out that impact how our customers report overtime hours. We have to make sure we help them stay in compliance.

Ryan: Are you looking to provide the most basic and fastest way to comply with the regulations? Or are there other objectives you want included? I know the product strategy group has been targeting certain areas of the application for a refresh.

Kenton: Nope. I just want the simplest, fastest, cheapest path. No product development or innovation included here.

Ryan: OK. Can you provide me with a copy of the new regulations? I’ll get with my team to assess impact and generate some options and very high-level planning numbers. We may need you to be available all afternoon to answer questions. I’ll try to give some budget guidance by the end of today.

Kenton: Perfect. I’ll clear my schedule this afternoon and I’ll have legal email the new regulations as soon as we’re done talking. What else?

Ryan: I need to be clear with you. This will be a planning number. Think of it as a number we can work together to manage to. Even though I won’t be able to create a commitment-level estimate, I’ll make sure my team generates a list of assumptions and risks that could really impact the final cost.

You’ll be able to influence the budget by keeping these risks and assumptions in the front of your mind and by keeping changes to a minimum along the way. We can set up daily or biweekly status meetings to keep visibility high on how we’re doing at managing everything together.

Kenton: Sounds like a plan!

The Wrap-Up

Fear can be a powerful barrier between business and IT. Because requirements move so fast, business people frequently go to IT with fuzzy objectives, but they still expect IT to be a predictable partner.

Situations like this are an ideal opportunity for IT to be a strong ally to business without appearing foolish or taking career-threatening risks. IT leaders need to expose what is driving their concerns in a way that is meaningful to their business colleagues. Start by making sure everyone understands why the project is being done to begin with. Once IT is clear on the business drivers, it can right-size the solution to maximize business value. If, for example, a function must be included for regulatory reasons but offers minimal customer value, IT might decide to focus on a minimum viable solution and quickly get it into production.

Second, IT needs to become more comfortable providing estimations of cost, time, and resources. Even when the business is forced to implement changes due to regulations or other outside factors, they still need to establish a business case. As IT leaders, it is our job to help the business understand what they are getting. We need to clarify what the numbers mean, address potential impacts, validate the numbers, and figure out how to protect our estimates.

Finally, once you provide an estimate of any kind, make sure to communicate clearly what it represents and what can cause it to change.

If you can do this in a way that is consistent with your culture, you will deepen your understanding of the problems the business is trying to solve—as well as improve your ability to be a true partner. It won’t be long until you find your comfort zone when called on to tell the business how much something costs.

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