You might not be surprised to hear that over 66% of IT projects go over budget and more worrisome is the fact that 17% do so, so severely that they threaten the existence of the company.
Here are four ways unexpected costs can creep into your migration budget and, more importantly, how to plan for them from the outset and avoid nasty surprises.
1. Over Or Underestimating Infrastructure Capacity
Newer systems will likely require a complete IT refresh, and often a significant increase in resource. Your old environment will need to run concurrently for the duration of your project, so you’ll be incurring costs for both.
If you’re hosting the software on your own, internal systems, your software provider will usually indicate the resource requirements. However, for an accurate picture, it’s always best to use a specialist provider who understands your use case and industry to forecast those costs accurately.
We’ve seen examples of this at both ends of the spectrum, finding law firms that are overpaying for unutilised resource, or faced with significant cost increases as their provider underestimated resource requirements to reduce the perceived Total Cost of Ownership, helping them close the deal.
Ensure you obtain advice from a specialist or someone who has worked on this type of project previously.
2. Licensing Issues
You’ll need to consider licenses outside of the main software application you’re migrating to, eg. Citrix or Microsoft. When these additional costs are not understood up-front, this can be a significant source of overspend, with many firms not realising until installation.
To help mitigate this, ask a specialist to complete a SAM (Software Asset Management) review to understand what you have, what can be used and transferred to your new environment and what additional licenses you may require.
There are a number of factors that impact on licensing. For example, whether you have perpetual licenses or subscription, the type of environment (e.g. Cloud hosting) and the delivery method of the application (e.g. Web-based, Citrix Desktop).
Ensure you know exactly what licenses you require and that they all work together when costing your migration project.
3. Business Disruptions
Downtime is a serious concern, with the Solicitors Regulation Authority reporting an average cost to business of up to £10,000 for every hour systems are down.
Unplanned downtime can be even more catastrophic if there are insufficient backup and Disaster Recovery procedures in place. While you may initially prioritise the new systems, implementing this in your old environment is just as important.
You can also expect a loss of productivity during the implementation, more disruptive though, is a lack of proper planning and underestimation of the time required, resulting in more people being pulled into the project, interrupting business as usual.
4. Delays To The Schedule
The study we mentioned earlier also highlighted that 33% of software projects overrun schedule. Further research into this by Hitachi showed the leading indicator of schedule and budget overruns for projects of this nature was team member experience. You must ensure you have people will the appropriate skills managing each element of the project.
Most reasons for delays will be quite familiar. Shifting requirements, feature creep (i.e. continually adding fresh requirements throughout development) and unrealistic schedules are the most common. Determining the appropriate schedule and scope of the initial migration and agreeing on this with all major stakeholders before work commences, will help manage these unforeseen costs.
When faced with a delay, understand what the cost is to your firm of a project overrunning. Decide whether to commit more resource or accept that the timeline will slip.
Is your firm changing its Practice Management Solution?
When implementing new software, you’ll typically need to allow at least two years. This ensures there’s time to assess requirements, build a comprehensive plan, and manage a smooth transition to your new software, avoiding unnecessary teething issues and downtime.