Estimating the cost of new technology products

Unfortunately, major projects employing new technologies are extremely pron e to cost and timescale overruns. It is believed that this is due to two ma in reasons. The first is the difficulty in preparing accurate estimates. Th e second is that the long development cycles allow time for market conditio ns and customer needs to change, and these changes inevitably add to the co st. This paper presents a practical discussion on the reasons why new techn ology projects are especially prone to cost overruns and how projects shoul d manage the technology and surrounding issues. In particular, an appreciat ion of the capabilities and limitations of cost estimates by management may help to avoid some of the poor decision making which contributes to cost a nd schedule overruns. The paper discusses some of the ideas from project an d risk management for effectively introducing new technology, helping proje cts to successfully meet the needs of both the customers and the project it self.