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There are five categories of resources that need to be assessed:
- Funding — Assess the current funding availability and compare it with the funding required to accomplish the project.
- People — Ensure that there is sufficient human capital to develop, manage, and operate the project.
- Facilities — Ensure that existing facilities can accommodate the project.
- Technology — Analyze the organization’s current state of technology, and determine what will be required to enable effective operation of the proposed project.
- Other resources — Analyze other resources that the organization has, and determine which additional resources may be needed to carry out the project.
During this stage, the purchase/SCM team will evaluate the need and determine the relative impact on available resources. The following should be reviewed at this stage in the process:
The resources available are organized to deliver objectives in the most economical, efficient, and effective way possible.
In the early stages of a project, costs are generally estimated. The three most common methods of cost estimation are:
- Expert opinion — An estimate based on the personal experience of a subject matter expert (SME).
- Analogy — A more formal approach to expert opinion, using direct comparison with one or more past projects.
- Rough order of magnitude (ROM) — An approximation of the project cost when high-level requirements are available, but not detailed data.
The nearest calculation of real costs will be determined when calculating the TCO; the total cost incurred over the life cycle of a product or service. Requirements for funding must be revisited at this stage, to ensure that adequate funds will be available and realistically estimated. The organization’s ability to fund a purchase is derived from the annual budget.
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