Let's stop making IT up

Cost consultants set the budget expectations for every aspect of a client's project. While the traditional design and build elements can be priced reliably based on easily quantifiable data, IT is notoriously fickle and subject to rapid change and obsolescence. Furthermore, IT consultants are almost always introduced to a project too late, which can require the cost consultant to ‘create' this element of the budget at the outset.

The key issue is that cost consultants do not always appreciate the subtleties of IT and AV infrastructure and systems. Given the mission critical role that IT plays in the operation of nearly every business, the constraints posed by an incorrect IT budget are potentially serious.

The budgets allocated for IT systems are consistently inaccurate. At best, estimates are based on well-documented IT projects but, given the pace of change in IT, even the most diligent IT cost research can quickly become redundant.

At worst, the estimate is simply a guess. For a standard office project, this can lead to a cost estimation of say £250 per user that does not fully consider the brief, the level of sophistication required or the need for reconfiguration. Unfortunately, this figure often sets the expectation and defines the IT budget.

Out of touch

An example of a gross miscalculation is a recent £26m office development in London, which was allocated a budget of £1.2m for its IT systems. The client wanted to exploit the opportunity presented by the project to renew many domains of technology and change the way IT supported the business, the actual cost of which was £6.1m. This represents a discrepancy of 500%

Roughly speaking, in a typical office environment, the IT and telecommunications budget represents approximately 15-25% of the total fit-out cost.

A recent £26m office development in London was allocated a budget of £1.2m for IT systems... the actual cost was £6.1m

However, for a trading or specialist IT environment this can increase to 40%, while in some instances figures as high as 60% have been known.

Education is needed. If the IT consultant is not going to be consulted prior to the setting of the budget, then there are some key principles to consider. As is to be expected, the true expenditure required for IT is subject to a complex set of interdependent variables.

First and foremost is the level of sophistication required by the client. Some clients need to benchmark themselves against their peers, while others are more constrained by budget. Whatever the drivers, nothing can be costed without a full appreciation of what is needed.

Second, the level of security and resilience required for the systems - maintaining operations with no single point of failure and averting the risk of losing operational integrity. Business continuity plans must be inherent in this process since they determine key spaces such as equipment rooms and back-up sites or data storage.

Thirdly, the scope of work needs to be stipulated. On a basic level it can be limited to structured cabling. On a more complex level it will comprise the full integration of IT infrastructure, networks, voice, audio visual, desktop and enterprise systems (known conveniently as INVADE).

The design and implementation of this IT mix has an enormous impact on the building infrastructure and M&E design.

Engaging an independent IT consultant for a few days of due diligence can pay dividends

Finally, there is then the cost of project managing the installation to ensure it is fully tested and runs smoothly so the occupant can move in without risk and start work immediately.

Cost consultants should be more open to either seeking the advice of an IT professional or recommending to the client that, given the complexity of his requirements, an expert is needed to set the budget at the right level.

Ideally this should be done at the project outset, when other professional team appointments are made. Even when IT issues seem some way off, certain clients still need a heads up on the IT project cost, where engaging an independent IT consultant for a few days of due diligence can pay dividends.

Failure to do this causes unnecessary tension. The IT consultant, based on experience, expertise and dialogue with relevant client personnel, provides an actual cost that can be completely at odds with the cost consultant's budget. Does the client, then, perceive the IT consultant as artificially inflating the IT budget or does he reprimand the cost consultant for gross underestimation? Either way, it is a ‘lose lose' situation.

Closer liaisons between the IT and cost consultant should be encouraged early on. Project risk is often associated with the technical elements of the installation but problems occur much sooner if the financial element of the business case is not realistically addressed. We are all professionals and sharing such specialist knowledge can only benefit everyone.