Management and Finances

Recognizing Overrunning Cloud Project Costs

By David Taber

Too often, cloud integration initiatives result in some unwanted surprises in cost. In fact, these overrunning costs happen with alarming regularity. But these cloud project surprises have a certain anatomy to them, and recognizing the patterns is the first step toward solving the issue.

David Taber writes, “I recently conducted an informal survey of some cloud integration companies and found something deeply troubling. Aside from ‘cookie-cutter’ or formulaic quick-start projects, more than 70 percent of cloud consulting engagements involving new customers resulted in either a 10 percent cost overrun or a change-order. The bigger the project, the more likely the overrun.

“You can blame it on stupid consultants or bad estimation or nutty customers or sunspot activity, but blame does no good. Something is going wrong here, and it’s causing a lot of heartburn for customers and vendors alike.

“In an earlier article on trends making the cloud consulting market treacherous, I mentioned that a root cause of any cloud overrun is mis-set expectations: customers believing that meeting their requirements will be simpler than it is and that it should cost less than it will. However significant that observation may be, it’s not particularly actionable. So let’s take the next step to understand the driving specifics, and what steps we can take.”

Read the full article for more details.