Question

List and describe at least six types of costs related to implementing a software acquisition project.

Answer 1

The six types of costs related to implementing a software acquisition project are:

1. Software application license- module of the software that meets the business requirements, price is based on factors such as the number of users using the software application concurrently, number of employees to be maintained in the database, different price levels, etc.
2. Training costs- what amount of training to be provided for the employees? What are the required standards for the organization? What is the cost of setting up a training center at the business location or outside the location?
3. Hardware upgrades- that is required for the compatibility of the software application. Cost involved in the different categories of the hardware products.
4. Additional software development costs such as additional programming cost, allied software packages to support the main software application, etc
5. Vendor support services such as report writing, consultancy services, costs incurred by vendor consultants, such as travel and accommodation, costs for temporary staffing who are required for implementation, fees for interface development, etc.
6. Annual maintenance charges- for all the software and hardware that would be acquired. Price bands for each, technology advancements, etc.