Project Costing


Generally, the delivery head  / practice head determine and allocate the project cost for each project. The project costs are arrived at based on the initial estimate prepared. The project costs shall be used as reference for the project tracking done monthly. For maintenance projects based on the nature, the costing method needs to be modified accordingly

However, the project cost can be calculated as:


Project Costs = Direct costs + Indirect costs

1. Direct Costs :  Estimated efforts ( in hours) * Internal cost to company

Estimated efforts for the project is taken directly from the L0 or L1 estimate which ever is agreed upon with Customer.

Internal Cost to Company is the blended monthly direct cost rate of the resources determined on a per hour basis.

  • While preparing costing for new projects,  the current Internal Cost rate of resources shall be used by the Practice Heads to arrive at the Project Costs.
  • The Internal cost rate varies for resources utilized at offshore from that of the resources used at Onsite.
  • Assumptions listed in Estimation sheet needs to be considered while arriving at the direct costs.

2. Indirect Costs = Cost of internet or intranet connections, Power  +  Hardware cost + Software cost + Travel Cost + Training Cost  etc.

There are two other important considerations:

  • Confirm all assumptions
  • Don’t expect trouble-free projects



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