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Large IT Project - Estimations on Contract?

Posted on 2008-10-01
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Last Modified: 2010-04-21
We are a small IT company that has been in business for nearly 5 years. We have an office on main street and service all things computers - residential and commercial. We have quite a few commercial contracts where we manage their networks, websites, etc.  

Had a meeting today with a local business and the project they would like us to bid on is quite large. They currently have a main office and one branch office. They use SBS03 and around 30 users. They use SBS primarily for AD and Exchange.  They will be opening up 2 more offices and 6 smaller (1 computer) branches soon.  They plan on having over 100 employees at that time so SBS is out and Server 2003/2008 is in.  

So... we will be handling everything. Ordering new hardware for all the new employees, new server, new everything. We will be setting it all up... physical and logical.  We will be handling tape backups, day to day duties and everything else that goes into a project of this magnitude. We will also be designing a website and hosting that for them. So in the end we will be setting up Server 2003/2008 and a separate Exchange server and a few file servers for over 100 employees branched over 9 locations.  

While we can certainly perform these duties... we have never had a request for one of this size.

Any ROUGH thoughts, based on what I wrote (there is more we will be doing but I cannot divulge too much), on what a good bid for labor would be (excluding hardware costs)?  I would like a price for both setting it all up to the point of working and then the cost of 24/7 maintenance of all the offices included on-site daily checkups.  

**This is a double post of sorts - I couldn't change my zones so I would like to try out this question in a few more zones.**
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Question by:Tercestisi
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LVL 95

Assisted Solution

by:Lee W, MVP
Lee W, MVP earned 100 total points
ID: 22619794
First, while SBS is out, if you convince them to hold off on implementation for about 2 months, you can get them Essential Business Server (EBS) - which will cost them less than full stand-alone products and give them added benefits.  If you are a Microsoft TechNet Plus Subscriber or MSDN subscriber (as a small IT company, you really should have the technet subscription, I believe you can download fully functional versions of EBS now... for TESTING - NOT DEPLOYMENT.  

Given your lack of information - and frankly, a lack of ability to see the client's needs first hand, it's virtually impossible to give you anything other than a rough estimate. Indeed, my rough estimate would be based on my own skill level - if your not as skilled as I am, it'll take longer... if your more skilled than I am, it should take less time.

If you get volume licensing for Windows, you should be able to image machines - imaged machines will allow you to configure one and then dump the image on a bunch of others - Vista is GREAT with this, but Vista otherwise can be a pain (so are you using Vista or not?)  Imaging a box with Vista could take 20 minutes per... but you would do things concurrently, right?  So if you could do 10 machines at the same time, then that's more like an AVERAGE of 2 minutes per machine for 100 machines - assuming you are replacing/adding all new machines.  So that's 4 hours or so to image 100 machines... I'd probably double that and say 1 day.  But that's me.  And that requires appropriate knowledge and software, depending on the OS.

Are you going to sit there and enter 100 user names into the domain, averaging 2 minutes per user (in part because of the tedium)... or are you going to script their creation in 10 minutes.  That's a difference of 3+ billable hours vs. .25 hours.  I don't do web design, so your on your own with that (or perhaps someone else can contribute about that... but logically speaking... without knowing exactly what they want in a web site, how can anyone possibly give you a ballpark figure on that.

with an environment of 3 major offices and 6 small one person offices, I would probably suggest, hardware wise, a minimum of 5 servers (POSSIBLY, depending on hardware spec, 3 physical servers, one with 3 virtual servers on it, running on Hyper-V for example).  The main office gets the EBS main system.  The large branch offices get 1 DC each that also acts as a file server.  Connect the sites via VPNs and use a good UTM device - I'd be inclined to suggest something from Fortinet - of course you need one per site.  An alternative might be the VPN devices from NetGear - they are EASY to setup and you can stick small ones at the 1 person offices and larger ones at the main and major branch offices.  
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Author Comment

by:Tercestisi
ID: 22620437
Thanks for your answer.

Sorry for being short on info, but that was purposeful. I know that doesn't help, and makes the question harder, but that is why I specified a rough estimate.

Remember, I'm not in the dark here by any means; just wanted to strike up a conversation regarding scaling our typical fees to a larger project.  Though your information was valuable, you didn't supply your rough estimate for labor. I already have my ballpark figure but I want to see if I scaled correctly or if I am off by a large margin.
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by:Lee W, MVP
ID: 22620506
How can I supply a rough estimate for labor?  I don't really have a clue what you are doing?  It's like asking a contractor to give a rough estimate on building a house for a family of 5.  And NOT GIVING ANY MORE INFORMATION for them to base their estimate on.  If you're looking for hourly rates, that depends on your area.  Like I said... if you are imaging workstations it will go a LOT faster than if you are installing them individually.  And how long it takes to do all this depends on numerous factors you haven't even given the slightest details about - connection speeds between sites - what you are going to do between sites - how many servers you actually intend to use...

Come on, if you want help, give us the information so that we can help you.  If you don't then why did you ask the question?  Are you concerned one of your competitors are going to see this and then submit a lower quote?  

Two perfectly competent SBS technicians can date different amounts of time to setup the SAME hardware on the SAME internet connection - YOU - and ONLY YOU - know how long it takes YOU and your staff to do these things...
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Author Comment

by:Tercestisi
ID: 22620664
I'll tell you how you can supply a rough estimate for labor - you do it.  It's rough... get it rough... not semi-smooth or exact but rough.  

I guarantee you if I called a contractor and asked for ROUGH estimates for a house that could comfortably hold a family of 5 that he/she could supply me a range of quotes (i.e. $X and up depending on options).  

I'll give you a rough estimate at how much you're helping me here: between little and zilch.

Get it?
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Author Comment

by:Tercestisi
ID: 22620703
Aside from leew, who I am sure is knowledgeable and even helpful in certain situations, I am still open to other comments.  I don't want to argue, there is nothing to debate, and if you simply don't have an answer then don't comment - plain and simple.

To clarify, I am not looking for hourly rates. I'm not looking at giving any more details.  I'm looking for an extremely rough estimate; this project is much larger than anything else we have ever taken on.  We live in a very small town and everything here is personable. They know our business, they know our capabilities... I have even offered to help them find a competitor if they would like that guidance. I have even told them it may be better if they hire a dedicated IT person. Alas, they are set on us and I will personally be working passionately and closely with this organization. Don't worry, I'm not going to charge what anyone says here, I'm not asking for anything close to the world... I'm just looking for ideas. I KNOW what my answer to this question is... I just want to hear other peoples answers - is there anything wrong with that?  A wise man seeks wisdom... a fool counts his own as the only worthwhile. Tell me this... because I ask a question, does it mean that I do not know the answer? Can I only ask questions when I don't know the answer?

Bah... made me write all that leew... sometimes though...
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by:Lee W, MVP
ID: 22621531
Ok, fine. A ROUGH estimate that no SANE person would listen to...

Between 12 hours labor and 2000 hours labor.  Because who knows what you're doing for them or how your doing it.
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by:Ben_Ang
Ben_Ang earned 100 total points
ID: 22621546
Break it down into chunks,

Support and Projects.

They sound like growing company which you obviously have a good relationship with. So meet with them and as the trusted advisor they will tell you their ball park intended budget for this growth.

What I can tell you is although there will be middle ground, the path of least pain for them and you is when you define their budget and the timeline.

All major works are quoted on at your normal install rates post a mandatory evaluation which costs $XXXX.00

For support go through the billing history, and calculate the historical cost of repairing the following, pc software issues, user problems, printer problems, router problems/updating, server maintanence/problems etc

calculate the time it would have taken to prevent these issues divide by number of PC/Users/routers etc,  add a margin for emergency responses an then link it to CPI and scale based on users.  

Make sure your ticketing system can report on the profitblitiy of this contract.

Break it down and it is easy, like you said they want you!

My rough figure figure for support per month would be (assuming 100 users, all pc's have one user and there are 6 servers 2 backup methods, remote management, monitoring support and 9 UTM's) around $15k per month with helpdesk and onsites if/when required.

Sorry If this is of no help.

 
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by:Mysidia
Mysidia earned 100 total points
ID: 22621689
Divide the project up into tasks and duties. Determine the list of materials and number man hours cost your org will need to accomplish each activity.

If you can't determine this, then your org may be lacking in management expertise,
and it will be very difficult to make a good estimate...
It depends too much on details we don't know about, as it depends highly on
planing/coordination, management, and skill of your staff.


Provide plenty of breathing room in your estimates, especially when it comes to estimating number of hours for a task.

Approximate BUSINESS COST  to you,  and double it  for safety, because it always costs more than you expect.    Determine what PERCENTAGE/AMOUNT PROFIT you want, add the appropriate amount.   Make your sales pitch.

Perhaps the easiest way to learn would be to underestimate the cost,
then you don't get much profit from the project, but you get a learning
experience, and in the future make better estimates,  plus get the positive
recommendations if your org does the job well.
OTOH if you overestimate the cost and the buyer walks away, you lose
a decent opportunity.


For example:  designing a website and hosting it should be divided into
(A) designing the website.
and
(B) hosting the website.

Something in your proposal should say how complex the website can be... what's "included"  in your offer.
After they sign, do they now get to ask you to design a 500 page site, and consider it "already paid for"?  

For (B) are you specifying how much hosting space, how much traffic their site can freely use?


If you're ordering new hardware...    well, you should list it, or at least  "number of generic workstations/servers to be replaced"  

You should plan ahead with regards to your human resources.

You think your staff can do X  with Y  man-hours of labor, but
what happens if you lose one of your experts at doing X,  or they're sick when
X needs to be done?

It could double the time required in some cases, or even cause you to need
to bring in an outside consultant for assistance.



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Accepted Solution

by:
Mark Wills earned 200 total points
ID: 22625085
You quite possibly have all the information already at you finger tips, just not quite all in the one job... So use your experience and expertise to come up with a list of "functions" to be performed - known as function point analysis, and then look at the efforts per function, then each function could quite easily be a project in it's own righ and someone has to keep an eye over the lot - known as portfolio management. That person, in small projects was probably one of the workers as well as the project manager - cannot afford to do that on a bigger mplementation - really need your better person allocated to the job but as a project manager, client liaison and administrator etc... Allow 25% contingency on any project you do...

hardware is kind of mechanical - so ordering is just that - preferred supplier, preferred configurations etc. Not too much opportunity for volume buys, but should amount to a reasonably sized order, and make sure it is branded equipment with a full on-site warranty especially if the support contract is included. It is a recursive effort of configuring the ideal, checking budget, reconfiguring accordingly. Hopefully they are reasonably cash rich or cash flow positive so you can afford slightly bigger, better equipment - especially being quite disparate.

Server configuration will be a lot more important and with remote offices, albeit small, the communications infrastructure will be critical.

Licenses can get significant. Try windows enterprise and standard SQL.

Labour is simply a sum of the parts for the build, and ongoing support will be the "profit" or "loss", depending on how well you can automate backups, sql server, notifications etc. Part of that automation process should be a fairly significant remote control / remote support facility.

Just as a "rule of thumb" would most likely be looking at a week for server hardware configurations (racks, domain server, exchange server, sql server, "office" server, backups, recovery processes, etc), a week for network confgurations (switches, hubs, comms, UPS etc), and then you need to allocate the appropriate time for loading applications, user profiles, on the server space. Part of the infrastructure consideration ( along with Comms ) needs to be security...

Client configurations should be reasonably easy to take care of, and have a few "floaters" so you can quickly and easily deploy a new / freshly configured machine to a remote site if needed for a swap out, though, if you get a good supplier with onsite support, that is one task at least that may be covered. 100 machines, takes a full day to configure a standard operating environment, then ghost it across the other machines - maybe 20 a day. The commissioning each - log in and check credentials and so forth. Packaging up and distributing and then the remote install...

Documentation till the cows come home. Remote install - are the users going to do that themselves, or do you plan to travel to the individual locations ?

Ongoing support will be fairly open ended - hedging by using the hardware supplier warranties and on-site support will help alleviate. With a hundred people though, there will be a reasonable expectation that the call centre / support centre will get hammered in the beginning, and suppose a person in support per few hundred end-points is reasonable - if you can automate a lot more then that ratio would change - and could easily / heavily depend on the "quality" of the customer.

Another part of that automation is a "self help" portal - with any of the automation strategies, there will be an upfront cost, but will make it run a lot better. So, do not forget about your own infrastructure and people when first looking at the "portfolio" which is really quite a few seperate projects.


If we look at a cost basis for labour then you are looking at a month for initial configuration and commissioning, then a person in support (true it may not be their sole job), the automation functions are hopefully "exception" based so you do get properly notified, but even still, there will be the daily requirement to run through various health checks - and that would exclude whatever was need to get them back up and running within the service agreement.

One strategy could be selling "service" tickets or lumps of time. Start with a "bronze package" of say 20 calls (or hours), and work your way up from there - that way abusers will have to pay for the privilege.

Is there anything a bit more specific that you can share, or anything in particular requiring more focus ?
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Expert Comment

by:Mark Wills
ID: 22641759
Thinking and re-reading, your biggest worry will be the ongoing charges for support - you will need a person for backups, help desk etc and whilst the work does not require the full time resource, you still have to pay for one - so - hopefully there is enough capacity, or, enough growth, otherwise it will be stretched, and will need to double check a few things because that is when the simple mistakes can happen... Would like to hear more about how you are set up / expertise / core competencies...
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Author Closing Comment

by:Tercestisi
ID: 31502200
Everyone, thanks for your help. Mark, I would like to personally correspond with you if that's appropriate. I have a complet Statement of Work that breaks down the scope, deliverables, etc. and it includes my estimated time, pricing etc. You may contact me at biggersmore@gmail.com as I'd really like to send the SOW to you to look over; maybe you can tell me if I'm off-base anywhere.
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