Chapter 3: Project Analysis: Will it Work?
How to Manage Your Website Project
A non-technical guide for building better websites


You now know why you need the website, the people you want to reach, and how you will interact with them. It is time to be certain that the project makes sense for your business. For most projects this will consist of two parts: The evaluation of the business case and the approval of the resources to accomplish the project. The actual process to accomplish these will depend on your company, the size of the project, and your internal procedures. Large companies will often have a formal process with a structured set of steps, while smaller companies may need only a manager’s sign-off.

Do not make the mistake of ignoring this, even if you are a very small company with only one or two people, the same issues still apply.

  • Business Evaluation: Why do the project?
  • Project Budget: How much will it cost?
  • Sensitivity Analysis: Does it make sense?
  • Risk Analysis: What happens if...?

Business Evaluation: Why do the project?

Before constructing a new store or buying major equipment, many businesses will conduct a formal evaluation and approval process to justify the capital expenditure. They analyze how the new store will perform in sales or how much additional production the machine will deliver. But when it comes to going online, too many companies put up a website because “everyone else has one.” Little or no evaluation is done, despite the fact that a website can have a major business impact on areas such as sales and customer engagement.

A business evaluation must be done for a website project to ensure it makes good sense for the company. The analysis focuses on the business reasons showing how this website will help support the overall company objectives. A good evaluation is essential for:

  • Demonstrating the project makes good business sense
  • Including the project as part of the business plan and budget
  • Encouraging people to support and join the project.

In the evaluation you should list the business objectives for the website and associated numerical data showing benefits and costs. This is no different than the justification for purchasing a new production machine in a factory. The cost of the machine will be compared to the savings in faster production rates and better quality to justify the expenditure.

Many times you will not have hard, factual numbers, so work with the best information that you can obtain. Compare your information with any available industry or sector data to see that it makes sense. If your industry growth is forecast to be 10%, is your plan to grow at 20% reasonable?

Project Budget: How much will it cost?

An important part of any project is the price. Unless you are doing everything yourself, money will be required to hire developers, designers and programmers; to purchase materials such as photographs; and to lease or purchase hardware and software.

Too often website projects are well underway with designs approved, contracts signed, and coding begun, when the actual price comes in, and it is a shock. Everything stops until this is sorted, often by an embarrassing request for additional funds or scaling back the project. Neither of these is an attractive choice, and this interruption makes managing the project more difficult.

An architect friend of mine often said,
Never fall in love with the design until you know what it costs.

Having precise costs at this stage is not possible since you have not yet set the requirements, but a good estimate is needed in order to:

  • • Set expectations of what the cost will be.
  • • Provide good information for making the business case.
  • • Make sure you have included everything.
  • • Build consensus and support.

Pricing Websites is Different

Estimating the cost for a website is a challenge because there is no standard website size or design for comparison and because developer costs, usually the largest component, vary widely. In addition, when describing what they want in a website, people tend to think in terms of actions and benefits:

We want a modern, interactive website constructed using software that is easy to use. Include a user-friendly interface which provides customers with up-to-date information about our products so they can quickly purchase directly from us.

But developers work to specific tasks such as installing an email module or adding a blog page. These differences in approach lead to confusion on both sides. Clearly defining the website project up front is a key factor to estimating the cost. If you cannot tell developers what you want, then they cannot provide an accurate estimate.

Start with a Preliminary Resource Plan

As a project begins, many project managers prepare a resource plan, a list of all the goods and services they will need for the project with any supporting information regarding quantities and costs along with where they plan to get them. The last point is particularly important, as it will show what you can provide yourself and what you must obtain from the outside. Depending on your own internal accounting practices, goods and services obtained internally may not be counted against your project budget.

Brainstorming sessions are a great way to build a resource plan. Include a variety of people to help cover as many areas as you can. Try to obtain specific information, especially for quantities and costs, but realize that much of this will be estimates and educated guesses.

Here is a sample resource plan for a small website project. Note that some costs are known, others are estimates or ranges. Using even this limited information we can estimate the project cost to be between $18,000 and $23,000. Selecting the highest number for programming and adding a contingency of 10% (Every project budget should have a contingency, things happen!), we can estimate the cost at $25,200.

table showing a website project resource plan with items, descriptions, sources and cost information.

Sample Preliminary Resource Plan

As the project develops, the resource plan can be refined to be more precise, ultimately becoming a part of your specifications and overall spending plan.

Obtaining Development Cost Information

The major cost for website projects is usually building or developing the website itself, so this is worth some additional attention. There are several ways to obtain estimates you can use in your resource plan and project budget request.

Ask Around

Talk to friends and colleagues who have recently had websites built and ask them about costs. Their sites will not be exactly the same as yours, but you can get an idea of the price range.

Ask Developers for a Price Range

A good way to estimate the cost is to contact several developers and ask them for a price range, not a quotation, which says the website will cost between $X and $Y. Tell them you are working on a budget and you want to have sufficient funds approved to complete the project. Keep your request simple and ask them not to spend too much time on it. A simple email or telephone call is sufficient at this stage. They should be happy to respond since this is a great lead for them for future business. Also, this gives you an early indication of how easy each developer will be to work with.

You will need to provide the developer with some basic information to give them an idea of the scope of your project. Use information from your Business Evaluation to prepare a brief outline of what the website must do to support your business. Even though you will not have details worked out yet, helpful information to include with your request are:

  • A site map showing top level web pages
  • A list of major activities you want visitors to do such as watch videos, download documents or make a purchase
  • Special features to be added such as a product catalogu
  • Any requirements to connect to external systems and service providers such as inventory, membership list, bank, credit card, and shipping.

Comparing the price ranges you receive ideally will give you a good idea of what the site is going to cost. Unfortunately, the price ranges you obtain frequently will have a wide variation. Because of the limited information you provided, each developer will have a different idea of what your website will be. Still this is very useful information for budgeting purposes, as it indicates the top end for what you can expect to pay, and you can make an appropriate entry in your project budget.

Other Costs Beyond Development

While the website development is the major cost, you probably will have to include other items such as:

  • graphic design services
  • content production: writing, video, photography
  • content editing
  • data preparation and cleansing
  • testing services
  • hardware and software for hosting

Developers can be good sources for estimates of these other cost items since they have seen website projects before. Ask them what else should be included. See the section How Developers Estimate Costs for more guidance.

You can also contact individual service providers and ask them for a similar price range. Again they should be happy to respond as long as you keep the request simple and easy for them.

Preparing the Budget

Many organizations will have a standard form for preparing a project budget. If not, use a general format which lists the major phases or categories of the project along with the estimated cost for each one. At the bottom include a contingency amount, generally a percentage of the total cost. It is good practice to include a contingency, because unexpected things will occur. Having the contingency saves the trouble of going back for additional funding and gives the project manager flexibility to run the project. A rule of thumb for a contingency is 10%, but this can vary depending on how well you can define the project at this point.

table showing a website project budget with design, build and testing phases, a cost for each, and a contingency.

Sample Project Budget

Sensitivity Analysis: Does it make sense?

Too often one hears a project justification such as, “There are over one billion people in China. All we have to do is get 0.1% of that market and we will have a million customers!” This is not a justification for a project but a dream. Look at the assumptions that underlie your project and confirm they make sense. If your goal is to increase online sales by 50% in six months, can your production capacity match? If you want to add 1000 new customers, do you have enough after-sales support and customer service to maintain your quality standards? What happens if the productivity rate goes up by only 5%, rather than the 20% you planned? Does the project still make sense?

Risk Analysis: What happens if...?

As part of the business evaluation, you must think about risk. As we discussed in Chapter 1, the online world is constantly in turmoil, making any Web-based activity more risky. External events can, and probably will, affect your project and ultimately your website, so you must consider them now. It is not possible to eliminate all risk nor to get someone else to accept it. Rather, design a flexible project so that when, not if, things change you can quickly adapt. Here are some common risks for website projects.

Can we finish it?

Before beginning, ask yourself honestly, “Can we finish this project?” Frequently IT and systems-based projects fail because they try to accomplish too much. It is easy to add features and requirements to a website because there is no physical object for comparison, and projects frequently grow over time.

There may be other reasons that will make completion difficult such as too few resources and a limited budget. Unless you are confident you can finish, it is best not to begin at all or instead to develop an alternative you can finish. There is nothing wrong with breaking a large, unmanageable project down into smaller stages which can be completed one by one.

Technology Can/Will Change

The online world is driven by constantly changing technology. If a particular technology is key to your online effort, then you must consider what happens if, but probably when, the technology changes. For example in the early 2000s I helped start a small company that made audio recordings of press conferences. These were posted on a website where people could listen to them at their leisure. Then podcasting arrived, people could easily do this themselves, and our business model became obsolete.

Project Fatigue

Every project has an expected life when it begins. A website will take months, while a new skyscraper will take several years to complete. Whatever the project, people sign up with an expectation of how much of their own time will be required to bring it to completion. But if the project drags on, they begin to tire, lose focus, and leave. Build a realistic project schedule at the beginning so everyone will know what to expect.

Business Processes Will Change

A website project often causes fundamental changes to the way a business operates as formerly manual processes and routines are automated and moved online. These process changes can disrupt business operations and meet resistance from people reluctant to adapt. Look at the underlying processes which will be affected by your project and make sure they can be successfully modified and adopted by your organization.


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