Managing IT project budgets and information system security threats

How many work weeks are in the project timeline, where work will actually occur?

The project timeline runs from 1 January 2017 to 31 March 2018. This implies that there are 65 weeks in total within this period. However, taking into consideration that there are three weeks for vacation, the number of weeks in the project timeline where work will actually occur is 62 weeks.

How much money does the team cost per hour?

There are 10 managers. The manager salary for an hour is $100. Therefore, the cost for managers per hour is $100 x 10 = $1,000.

There are 100 programmers and staff. Their rate per hour is $35 per hour. Therefore, the cost for programmers and staff is $35 x 100 = $3,500.

This implies that the team costs $4,500 per hour.

How much money does the team cost per week?

Every week contains forty working hours. Taking into account that the cost per hour is $4,500, the total cost per week is $4,500 x40 = $180,000.

How much money does the team cost for the duration of the IT project?

The total cost incurred for the team for a week is $180,000. The total number of weeks for the IT period is 62 weeks. Therefore, the total team cost for the duration of the IT project is $180,000 x 62 = $11,160,000.

Remembering that maintenance is amortized, that payments begin during the first month of the project, and that all other system costs are assigned to the project, what is the total systems cost through the timeline completion on 31 March 2018?

Amortization takes into account the disseminating payments over a particular time in multiple periods. These payments that are spread out are equally paid out in the various payment periods (Deegan, 2013; Riahi-Belkaoui, 2004). The system maintenance is amortized through a five-year period and the total cost is $5.0 million. This implies that for every year, the amortization cost is $1.0 million. The total timeline period is 62 weeks and this is equivalent to 1 year and 2.5 months.

Taking into consideration that 1 year = 12 months, 2.5 months will have an amortization cost of 2.5/ 12 x 1.0 million = 0.2083 million. Therefore, the total amortization cost for the IT project timeline will be 1.2083 million.

The other system costs include systems planning cost of $100,000, systems development cost of $1,400,000 and system fielding cost of $300,000.

Therefore, the total system cost is calculated as follows:

Cost

$ million

System maintenance

1.2083

Systems planning cost

0.1

Systems development cost

1.4

System fielding cost

0.3

Total system cost

3.0083

The total system cost is 3.0083 million. Rounded up, the total cost is $3 million.

What is the total project cost through completion on 31 March 2018?

The total system cost as obtained above is $3.0083 million. The total team cost is $11.16 million. The total project cost includes both the system cost and the team cost. Therefore, the total project cost

Cost

$ million

Team Cost

11.16

System maintenance

1.2083

Systems planning cost

0.1

Systems development cost

1.4

System fielding cost

0.3

Total project cost

14.1683

The total project cost is 14.1683 million. Rounded up, the total cost is $14 million.

After project completion on 31 March 2018, what will be the remainder cost for maintenance that will still need to be budgeted and managed?

Subsequent to the completion of the project on 31 March 2018, the total amortization cost for the IT project timeline will be 1.2083 million. The total amortization over the course of the five-year period is $5.0 million. Therefore, the remainder cost for maintenance that will still need to be budgeted and managed is

$5.0 million - $1.2083 = $3.7917

Therefore, the total remaining cost will be $397,170.

Forecasting a budget with no strategic reserve, what should the project cost per month be for the budget during the project timeline?

In delineation, strategic reserve is reserving of an item that is controlled or restrained from pursuing a certain strategy so as to deal with unexpected and unanticipated events.

Therefore, devoid of any strategic reserve, the total project cost will be similar. As calculated above, the total cost of the project is $14.1683 million for 15 months.

Therefore, the project cost per month for the budget during the project timeline is calculated as follows:

= 14.1683 / 15

= $0.94456 million

Therefore, rounded up the total cost for every month is $944,553.

With the addition of a 10% strategic reserve, what should the project cost per month be for the budget during the project timeline?

As pointed out, if the strategic reserve is in fact applied, it is only applicable to the maintenance costs in the course of the timeframe of the timeline. On the other hand, maintenance costs that surpass and go beyond the timeline have been negotiated as a firm fixed priced contract and do not necessitate the use of strategic reserve on top of the negotiated price.

Therefore, in this case, the 10% strategic reserve is applicable to the period between 1 Jan 2017 and 31 March 2018. The total timeline period is 62 weeks and this is equivalent to 1 year and 2.5 months.

Taking into consideration that 1 year = 12 months, 2.5 months will have an amortization cost of 2.5/ 12 x 1.0 million = 0.2083 million. Therefore, the total amortization cost for the IT project timeline will be 1.2083 million.

However, applying the 10% strategic reserve, the maintenance cost increases to

1.1 x 1.2083 = $1.32913 million.

Therefore, the total cost of the project increases to Cost

$ million

Team Cost

11.16

System maintenance

1.32913

Systems planning cost

0.1

Systems development cost

1.4

System fielding cost

0.3

Total system cost

14.28913

Therefore, the total cost increases to $14.28913

The total cost for every month therefore becomes $0.95260866

This implies the cost for every month will be $952,609

Considering that you decide to budget using the strategic reserve, and you need to budget for the entire maintenance cost, what is the total amount of capital you will need to raise to complete the project successfully during the timeline and then maintain the system through the full 5-year maintenance contract, noting that the first month of maintenance for the contract starts simultaneously with the start of the project?

If the decision is made for the budgeting to be undertaken using the strategic reserve and budgeting done for the whole maintenance cost, it implies that the initial cost of $5.0 million that was considered before increases.

Taking into consideration that the strategic reserve has an addition of 10%, then the cost increases as follows:

1.1 x 5.0 million = 5.5 million cost with respect to the maintenance cost.

Therefore, the total amount of capital that will be necessitated to be raised so as to finish the project fruitfully in the course of the timeline and then preserve the system throughout the full 5-year maintenance contract is calculated as follows:

Cost

$ million

Team Cost

11.16

System maintenance

5.5

Systems planning cost

0.1

Systems development cost

1.4

System fielding cost

0.3

Total system cost

18.46

Therefore, the total cost needed is $18.46 million.

Threats to Information Systems

One of the key threats to an organization's internal system encompasses unauthorized access through hacking. Owing to incessant advancement in technology, an organization faces the threat of hackers using such cutting-edge technology to gain unauthorized access to confidential and personal data and information. The main way to evade hacking from external parties is to use security systems and metrics. This aids in making certain that the resources within the information system are aptly safeguarded from threats. Another threat to the information system is viruses. These programs are a major concern as they can easily lead to data loss, with the possibility of crashing the entire system. The best way to mitigate this threat is by using the most effective anti-virus products. This way, the organization is able to scan its systems and clear out any viruses. A third threat to organizational information systems is theft. The loss of significant hardware, software or data can have dire consequences on an organization's efficiency. Theft can be categorized into three groups including physical theft, data theft, and identity theft. The best way to mitigate this threat is to have physical security system processes. This largely ensures that key personnel are granted access to the system. Another mitigation approach is constantly changing security codes given to the key personnel (Alghazzawi et al., 2014).

There are key considerations for a continuity plan. This is because sustaining security within the organization calls for an incessant way of governing the various security procedures and establishing a security culture. This is largely because simply employing specialists in information technology and communications (ICT) is solely not sufficient. Therefore, a continual plan ensures that the information system is constantly safe and secure from any unwarranted access and intrusion (Alghazzawi et al., 2014). The aforementioned threats pose ethical and privacy concerns for the organization in various ways. To begin with, the information system of an organization contains personal and private information of its personnel, suppliers and consumers. These can include their place of work and residence, their bank details and also medical information. Therefore, such threats instigate privacy concerns in that through hacking and unauthorized access, such personal information can be obtained.

References

Alghazzawi, D. M., Hasan, S. H., & Trigui, M. S. (2014). Information Systems Threats and Vulnerabilities. International Journal of Computer Applications, 89(3).

Deegan, C. (2013). Financial accounting theory. McGraw-Hill Education Australia.

Riahi-Belkaoui, A. (2004). Accounting theory. Cengage Learning EMEA.