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M3 Playbook > Phase 2: Selection > 2.2 Update Life Cycle Cost Estimate (LCCE)

2.2 Update Life Cycle Cost Estimate (LCCE)

Program Management

Task Activities

  1. Customer

    Identify changes required to the Life Cycle Cost Estimate (LCCE) based on cost estimates prepared by providers during Phase 2 including reasonableness and affordability

  2. Customer

    Compare actual spending with budget for Phase 2 and adjust LCCE as needed

  3. Customer

    Update LCCE for all future phases

  4. Customer

    Report changes to projected costs and results of actual spending in governance meetings and Status Reports/Dashboards, informing QSMOs as necessary

2.2 Best Practices

  • Conduct life cycle cost analyses and incorporate initial migration cost estimates from the provider in order to plan out-year budget needs and requests
  • Be realistic about when cost savings will be realized by tracking cost and efficiencies achieved during the full implementation of the vision through to the decommissioning of the legacy system
  • Include direct and indirect costs in estimates

Stakeholders

Customer

  • Executive Sponsor
  • Business Owner
  • Program Manager
  • PMO Lead
  • PMO Team
  • Budget or Financial Analyst (as needed)

Inputs

  • Life Cycle Cost Estimate (LCCE)
  • Business Capabilities
  • Target State Concept of Operations
  • Target State Systems Environment
  • Cost Estimates from Provider
  • Scope of Services

Outputs