CHAPTER 8

MIS PROJECT COST ESTIMATES

This chapter details the costs involved in implementation of the proposed IS and IT
solution for UPID according to the implementation plan provided in chapter 7. These
costs are suggestive in nature and will be fine tuned in phase 1 of the project.

8.1 Costs
The costs that will be incurred for implementing the proposed IS and IT solution will
be of two types one time and recurring. This section presents the build-up of one
time and recurring costs spread over time frame of the project. One time costs would
include the cost of servers, computers and peripherals, network components for LAN
and WAN, scanners, plotters, UPS, etc. The specifications of each of the component
is given in Appendix N. Recurring costs would include cost of operation and
maintenance of hardware and network components, charges payable to service
provider, cost of manpower for the IS organisation and outsourcing of services.
8.1.1

One Time Costs

One-time costs would include:

?? Costs for Hardware
?? Costs for Software
?? Costs for Communication Infrastructure
?? Costs for Miscellaneous Items
Refer to Appendix M for details on build-up of one-time costs.
8.1.1.1 Costs for Hardware
One-time costs will be incurred for purchasing hardware such as:
?? Server
- Application server
-

Mail server

Web server

?? PCs
- Workstations
-

Desktops
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Laptops

?? Peripherals
- Printers
??LaserJet printers (Small)
??Network printers which include LaserJet (Black) and LaserJet (Color)
??Line Printers (Black)
??Dot Matrix Printers
-

UPS
??1 KVA
??5 KVA
??10 KVA
??20 KVA

Scanners
??A0 Size
??A4 Size

Plotters

Digitisers

8.1.1.2 Costs for Software

One-time costs will be incurred for purchasing/procuring software such as:
?? Application Software
The cost for development of Application Software has been estimated as per the
calculations in following table.

Item

Value

Number of Function 6663 Function Points

Points
for
the for
applications
Application Systems
developed on Oracle
and
932
Function
Points for applications
developed on Lotus

Remarks
This is an estimate based on current
understanding
of
UPID
processes.
However, re-estimation is to be done by
Application Development vendor.

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Item

Value

MIS Project Cost Estimates

Remarks

Notes
Effort for Application 71290 person hours or Assuming 7 hours per day and 24 working
System Development
424.35 person months
days in a month
Productivity figures have been taken as 10
hours per function point for applications
developed on Oracle and 5 hours per
function point for applications developed
on Lotus Notes.
Cost of Development Rs. 424.35 Lac
of
Application
Systems
Actual Cost

Assuming Rs. 1 Lac per person month of

effort spent

fresh
~ Rs. 430.00 Lac Assuming
application
system.
(Rounded off to the
nearest tens)

development

of

?? RDBMS Package
It is assumed that enterprise version of RDBMS package for unlimited users will be
purchased and all authenticated users will have access to database.
?? GIS Software
GIS software with editing facilities at server side and viewing facilities at client side
will be procured. It is being assumed that changes, if any, in GIS data will be
incorporated at location housing server and end users can view them on their
desktops.
?? Modelling Software
Modelling Software will be purchased to facilitate organisation and management of
technical functions of UPID.
?? Mailing and Messaging Software
Enterprise server licenses will be purchased for mail servers and collaboration client
licenses will be purchased for clients. Clustering of server licenses will be done at
server.
?? Bandwidth Management Software
Bandwidth management software will be purchased to manage bandwidth and
improve performance of WAN. The cost includes cost of additional servers and
concurrent user licenses.

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?? Backup Management and Administration Software

Backup management and administration software will be purchased to manage
backup of servers at a central location.
?? Middleware
Middleware will be purchased to improve performance of application software.
?? Hindi User Interface
Hindi User Interface will be purchased for all users of UPID. It will enable users to
switch between English and Hindi as per their requirements.
8.1.1.3 Costs for Communication Infrastructure
?? WAN
- Leased Lines
??Routers
??Modems
-

Radio Links
??Microwave Radio Router
??Semi parabolic antenna

VSAT
??Outdoor unit
??Indoor unit
??Router

?? LAN
- Switches (24/12 ports)
-

Jack Panel

Rack with cable and power supply

Ethernet cable

8.1.1.4 Costs for Miscellaneous Items

?? Storage Unit
?? Tape Library
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?? Back-up Media
?? Video Conferencing Set-up
?? VoIP Set-up
?? Training
UPID officials will be given training depending upon their work spheres. Various
training areas and corresponding users have been identified in chapter 6.
The estimated one time costs exclude costs incurred on other works like site
preparation, building of data centre, acquisition of furniture, ACs, generators and
furnishing of buildings etc.
8.1.1.5 Build-up of the Total of one time costs
Phase 1 Hardware for mailing and messaging solution, Software for mailing and
messaging solution and costs for training
Phase 2 Remaining hardware, remaining software, WAN, LAN, Back-up media,
Video Conferencing equipment, VoIP, etc.
Table 8.1 and Table 8.2 give capital cost plan for centralised and distributed
architecture respectively. Capital cost plan has been prepared according to
Implementation Plan provided in chapter 7.

Table 8.1
Capital Cost Plan (Centralised Architecture)
Description
Costs for Hardware
Costs for Software
Costs for Communication
Infrastructure
Costs for Miscellaneous
Items
Total*

Phase 1
(In Rs. Lac)

Phase 2
(In Rs. Lac)

Total
(In Rs. Lac)

2310.00
97.00

2507.70
1410.00
2566.00

4817.70
1507.00
2566.00

165.00

498.50

663.50

2572.00

6982.20

9554.20

*Existing hardware will be accounted for at the time of preparation of bidding document.

Table 8.2
Capital Cost Plan (Distributed Architecture)
Description
Costs for Hardware
Costs for Software
Costs for Communication

Phase 1
(In Rs. Lac)

Phase 2
(In Rs. Lac)

Total
(In Rs. Lac)

2710.00
167.00

4807.70
2434.00
2566.00

7517.70
2601.00
2566.00
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Description
Infrastructure
Costs for Miscellaneous
Items
Total*

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Phase 1
(In Rs. Lac)

Phase 2
(In Rs. Lac)

Total
(In Rs. Lac)

165.00

498.50

663.50

3042.00

10306.20

13348.20

*Existing hardware will be accounted for at the time of preparation of bidding document.

8.1.2

Recurring Costs

Recurring costs will be incurred mainly for:

?? Annual Maintenance Contract (AMC)
?? Charges payable to Service Provider (WAN Connectivity)
?? Cost of Manpower for IS Organisation
?? Outsourcing of Services

Refer to Appendix M for details of recurring costs.

8.1.2.1 AMC
Recurring costs will be incurred for AMCs of the following.
?? Hardware
Maintenance of hardware has been taken as 8% of the hardware cost. This cost
includes the hardware upgrades, replacements, etc.
?? Networking
Maintenance of networking components has been taken as 10% of the cost of
communication infrastructure. This cost includes the hardware upgrades,
replacements, etc.
?? Software
- Application Software
It is assumed that application software vendor will provide 11 support staff personnel.
One person month has been assumed to be equal to Rs. 100,000/-.
-

Mailing and Messaging Software

It is assumed that vendor will provide 11 support staff personnel for mailing and
messaging solution. One person month has been assumed to be equal to Rs. 25,000/-.

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8.1.2.2 Charges payable to Service Provider (WAN Connectivity)

Recurring costs will be incurred for bandwidth charges for leased line, radio link and
VSAT in the form of service charges, royalties etc.
8.1.2.3 Cost of Manpower for IS Organisation
UPID will depute/recruit/hire manpower for IS Organisation and their pay packages
will form a component of recurring costs for UPID. The IS Organisation would
include a Chief Information Officer, Systems Managers, Analysts/Programmers and
Helpdesk.
8.1.2.4 Outsourcing of Services
Recurring costs will be incurred for outsourcing services for the following.
?? Hardware Maintenance
The vendor providing hardware maintenance will provide sufficient staff to cater to
the needs of UPID.
?? Communication Infrastructure Maintenance
- Maintenance of LAN
-

Maintenance of WAN

The vendor/s providing communication infrastructure

sufficient staff to cater to the needs of UPID.

maintenance

will

provide

Table 8.3 gives a summary of recurring costs.

Table 8.3
Summary of Recurring Costs
Description

Recurring Costs
for Centralised
Architecture
(In Rs. Lac)

Recurring Costs
for Distributed
Architecture
(In Rs. Lac)

Hardware (After Warranty)

385.4

601.4

Networking (Including WAN and LAN

after Warranty)

256.6

256.6

Support for Application Software

132.0

132.0

Support for Mailing and Messaging

Software

33.0

33.0

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Description

Recurring Costs
for Centralised
Architecture
(In Rs. Lac)

Recurring Costs
for Distributed
Architecture
(In Rs. Lac)

Charges payable to Service Provider

(WAN Connectivity)

218.0

218.0

Cost of Manpower for IS Organisation

62.0

133.3

66.0

66.0

120.0

120.0

1273.0

1560.3

Software

Outsourcing Cost for Services

Hardware Maintenance
Communication
Maintenance

Infrastructure

Total Recurring Costs

Note: The calculation of estimated costs in this section and appendices are primarily
based upon prices, terms and conditions obtained from the Web and/or
discussions with the vendors cited or their authorised partners. The consultants
do not represent or warrant that the prices and terms and conditions mentioned
in this document are accurate, complete or current. However, the prices and
terms & conditions are open to negotiations with the respective vendors. The
calculations have been done on the basis of 2200 users. The numbers have been
estimated for the completeness of calculations.
?? UPID Expenditure
As part of cost-benefit analysis, the expenditure and the corresponding figures where
saving is envisaged, have been classified below from the BM13 document (20012002). All figures are in thousand rupees.
a. Travel Allowance
Expenses on Travel allowances are shown below:

Financial Year

Head of Account Head of Account Total

2701
4701

2000-2001

62092

14084

76176

2001-2002

70579

17597

88176

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b. Stationary and Printing of Forms

Expenses on stationary and printing of forms are shown below:

Financial Year

Head of Account Head of Account Total

2701
4701

2000-2001

6380

1205

7585

2001-2002

6995

1545

8540

c. Telephone Expenditure
Telephone expenditure are shown below:

Financial Year

Head of Account Head of Account Total

2701
4701

2000-2001

2726

386

3112

2001-2002

4501

643

5144

d. Publication Expenses
Publication expenses are shown below:

Financial Year

Head of Account Head of Account Total

2701
4701

2000-2001

494

17

511

2001-2002

460

19

479

The assignment is in the formulation of strategy phase. Some of the cost items have
been identified in this report. The quantification of savings for UPID related to MIS
project will involve large effort. Hence, the quantification of savings on manpower,
travelling, telephone, water etc. will be dealt separately and will be submitted to UPID
in a different report. The inputs from institutional strengthening consultancy being
carried out by UPID will also be taken for preparing the report.

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8.2 Benefits
Information Technology facilitates improvement of operational efficiency by enabling
the availability of reliable, accurate and updated information. Further it reduces the
amount of time spent on manual exchange of information, which is most often a
critical bottleneck causing delay in operations. Some of the envisaged qualitative
benefits of implementing the proposed MIS solution in UPID are detailed below:
?? Effective Decision Support
Implementation of the proposed MIS solution in UPID will facilitate the timely
retrieval of accurate and up-to-date information. The facility to make on-line queries
will also reduce the delays involved in retrieving and compiling information
manually. An effective MIS will assist the management to make timely and effective
decisions based on data rather than on intuition and gut feeling.
?? Effective Planning and Analysis Based on the Factual Data and Trends
Data maintenance, a salient feature of the proposed MIS solution, will ensure that data
corresponding to various functional areas, is constantly updated, thereby providing
timely, accurate, reliable and updated information on various functions for effective
management, planning and control.
?? Performance Monitoring
The proposed MIS solution will enable monitoring of various activities of UPID
based on the information collected. The proposed MIS solution will provide for
automatic checks that generate warnings for abnormal conditions. This will enable
effective monitoring and control by providing quick means of detecting any
unacceptable variations or deviations early enough for corrective actions.
?? Increased Productivity
Automation of routine tasks will lead to increase in productivity of personnel, since
the personnel would be able to handle larger volume of work.
?? Reduced Documentation
The data-sharing feature in the proposed MIS solution will enable a significant
reduction in manual document generation and duplication in data entry. The single
point data entry feature of the proposed integrated systems will reduce data
redundancy.
?? Improved Job Satisfaction to Users
Total computerisation will result in better job satisfaction to users, as the computer
will perform routine computational and other repetitive tasks both efficiently and
quickly. This will result in an improved utilisation of manpower.

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?? Enhanced Transparency
Total computerisation will result in better transparency for the department, as majority
of the tasks will be computerised hence retrieval and verification of the data will be
faster.
?? Enhanced Communication
Establishment of network across UPID will enhance communication and decision
making in UPID. The solution will lead to improved workflow.
The other benefits of MIS solution will be lesser process time, lesser establishment
costs etc. Reduction in manual data retrieval and transfer would result in greater
employee satisfaction and higher manpower productivity. Thus the implementation of
the proposed MIS solution will result in several benefits to UPID in the performance
of its functions. Thereby, it will help UPID to achieve its objectives.
All these benefits would also enable UPID to perform its major role of water resource
management in a better manner and thus serve the people of the state.

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MIS Project Cost Estimates ........................................................................................... 1

8.1

Costs............................................................................................................... 1

8.1.1

One Time Costs...................................................................................... 1

8.1.2

Recurring Costs...................................................................................... 6

8.2

Benefits ........................................................................................................ 10

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