Pricing in retrospect
In these poor economic times, government bodies are finding ways to save money, and in doing so they are giving us good information about just how much some IT projects cost in the first place.
When the new Government came to power, one of its early announcements was that it was scrapping the ill-fated identity card scheme and, in doing so, would save itself a further £86 million pounds over the next four years. That is an astonishing cost, especially when you consider that the people receiving the card also had to pay £30 each for the privilege. It is also reported that the total costs so far, which includes the cost of preparing legislation, have amounted to £257 million. As there were only 13,000 cards issued during the lifetime of the scheme, that works out at a mind-boggling twenty thousand pounds per card.
Perhaps those breath-taking figures make this next figure more palatable. As part of its decommissioning of the scheme, the government is awarding a contract to an external supplier for it to securely erase the data which was collected for the National Identity Register. The cost of destroying this personal data will be £400,000. Again, on the basis that only 13,000 cards were issued, this works out at around £30 per card to erase the data. One might wonder how much data there was. Even if there was several megabytes of data per ID card, that's still only tens of gigabytes, and I could fit all that onto the disk inside my laptop. Can it really cost £400,000 to incinerate the disks and the back ups?
Over at the BBC, they too are looking for ways of saving money, and the Beeb has announced it will be cutting back on a number of websites. The BBC's web budget of a little over £130 million is by far the largest for new media firms in the UK. It currently runs around 400 top level domains encompassing both its core sites and a whole host of mini sites, one-off specials to support TV features, and campaign sites such as no less than three separate sites dealing with global warming.
Now, as part of its austerity program, Director General Mark Thompson has said the BBC intends to close around half of those websites, cutting the budget by around £34 million, at a cost of 360 jobs. So if we assume that they are closing around 200 websites, that means that on average those websites required between one and two people working on them full time, and the average cost of running those sites was in the region of £170,000 per year. Most people massively under-estimate the cost of running an effective website, but even hardened website managers will probably gulp at the costs incurred by large national sites like the BBC.
It is also interesting to note that the BBC considered but rejected the idea of developing a social media network akin to Facebook. Even its existing message boards will be trimmed back as a cost saving measure because the BBC recognises that people wanting to talk about its programmes are already talking on Facebook and Twitter, and there is simply no reason to try to reinvent those channels.
28th January 2011
This article comes from the SKILLZONE email newsletter, published monthly since January 2008, and covering topics related to technology and the internet. All articles and artwork in the SKILLZONE newsletter are orignal content.