Estimating IT networking costs in construction projects

As buildings increasingly incorporate advanced technology into their design, estimating construction costs becomes more complex and crucial.

Estimators face unique challenges when preparing cost estimates for projects that include IT networking, and their experience and partnership with IT experts are integral to the success of these projects. 

With smart building systems, data centres, and complex network infrastructure integration, understanding and accurately predicting IT networking costs has become crucial to construction project planning.

Let's delve into the challenges that construction estimators face when preparing costs for IT networking. We'll also provide some valuable insights into how these challenges can be effectively addressed.

1. Complexity of IT requirements

One of the foremost challenges is understanding the specific IT needs of a building. As construction projects become more technology-driven, the complexity of IT requirements increases. Estimators must account for everything from basic networking needs to the integration of smart building technologies.

"The complexity of IT requirements in modern construction projects cannot be overstated. Estimators need to stay informed about the latest technologies and ensure the infrastructure can support their clients' and tenants' evolving demands. Partnering with a technology expert at an early stage can minimise unexpected costs."
Mark Waldmeyer, Lead Solutions Architect

The fast-paced evolution of IT technology presents a significant challenge for cost estimation. New technologies and innovations can emerge after estimates are completed, potentially altering project requirements and impacting costs.

2. Integration with other systems

Integrating IT networking with other building systems, such as security, HVAC, and electrical systems, adds another layer of complexity to the estimation process. 

In a new construction project, integration can be planned from the outset, with all systems designed to work harmoniously together. The challenge becomes even more pronounced in existing buildings where upgrades to IT networking infrastructure are needed. Retrofitting IT systems into an older building can pose several difficulties:

Incompatibility with Existing Systems: Older buildings often have legacy systems that may not be compatible with modern IT infrastructure. For example, an older HVAC system might not support the data communication protocols needed for modern, networked controls, requiring complex workarounds or a complete system replacement.

In some cases, completely overhauling existing systems may not be feasible due to budget constraints or the need to preserve certain historical aspects of the building. This means that new IT infrastructure must be carefully integrated with existing technologies, which can involve complex customisation and testing to ensure the old and new systems work together seamlessly.

Limited Space for New Cabling and Equipment: Older buildings may lack the necessary space to accommodate the cabling, servers, and other hardware required for modern IT systems. The physical structure of an existing building can limit the placement of networking components, such as access points or cables. Walls and floors may need to be altered to accommodate new cabling pathways, which can be invasive and time-consuming.

Electrical Capacity Issues: Modern IT systems often require more power than older buildings were initially designed to supply. Upgrading the electrical infrastructure to meet these new demands can add significant cost and complexity to the project.

Downtime and Disruption: Integrating new IT systems into an existing building often requires shutting down parts of the building's infrastructure, which can disrupt ongoing operations. This downtime can be costly for organisations, requiring careful planning and coordination to minimise impact.

Regulatory Compliance: Upgrading IT systems in older buildings may trigger new regulatory requirements. For example, adding a new data network might require compliance with updated fire safety standards or environmental regulations, further complicating the integration process.

In summary, while integrating IT networking with other building systems is a challenge in any construction project, the difficulties are magnified when working within the constraints of an existing building. 

3. Vendor and supplier selection

Selecting the right vendors and suppliers for IT equipment and services is crucial for controlling costs and ensuring quality. Estimators must evaluate potential vendors based on reliability, cost-effectiveness, and the ability to meet project specifications. Examine vendor case studies to get an indication of their network experience.

Establishing strong relationships with trusted suppliers can help minimise risks and ensure successful project execution.

4. Regulatory and compliance issues

In the UK, compliance with building and networking laws is crucial. Estimators must consider regulations such as the Building Regulations 2010, which cover various aspects of construction, including electrical and telecommunications systems. Additionally, the General Data Protection Regulation (GDPR) impacts how data infrastructure should be designed and protected. 

Ensuring compliance with these regulations is essential to avoid legal complications and additional costs. Estimators must factor these requirements into their cost calculations and ensure that all IT components meet the necessary standards.

5. Estimating labour and material costs

Accurately estimating labour costs for IT installation and configuration is complex, particularly when specialised skills are required. Estimators must consider the expertise needed for different aspects of the project and account for potential fluctuations in labour rates.

Various economic factors, including inflation, supply chain disruptions, and changes in labour and material prices, have influenced the rise in UK construction costs over the past decade. Here’s a summary of how construction costs have changed each year 2013-2022, based on available data:

2013: Construction costs increased by approximately 2.8%
2014: Costs rose by around 4.6%
2015: There was a rise of about 3.9%
2016: Costs increased by approximately 3.5%
2017: The rise was around 2.4%
2018: Construction costs increased by about 2.7%
2019: Costs rose by approximately 1.5%
2020: There was a minimal increase of around 0.5% due to the impact of COVID-19
2021: Costs surged by about 7.0% due to supply chain issues and rising material costs
2022: Construction costs increased significantly by approximately 9.6%, driven by continued supply chain disruptions and inflation

Sources: BCIS (Building Cost Information Service), RICS (Royal Institution of Chartered Surveyors), and ONS (Office for National Statistics)

6. Unknown site conditions

Unforeseen site conditions can present challenges that affect the installation of IT networking. Existing infrastructure limitations, physical obstructions, or unexpected environmental factors can lead to delays and additional costs. Conducting thorough site assessments with an IT partner and collaborating with on-site teams can help mitigate these risks.

7. Budget constraints

Balancing project IT requirements with budget constraints is a common challenge for estimators. Clients may have specific demands that exceed initial budget estimates, necessitating creative solutions to meet project goals without compromising quality or functionality. This is where the estimator's skill combined with an IT expert's experience can bring a project on budget.

8. Future-proofing the infrastructure

Ensuring that IT infrastructure is adaptable for future upgrades is critical for long-term success. The needs of both clients and tenants will evolve, and having a long-term IT strategy for the building is probably more important than ever. 

Estimators can significantly enhance their value to clients by proactively seeking guidance from IT partners specialising in future-proofing strategies. By leveraging the expertise of IT professionals, estimators can provide clients with a more comprehensive and strategic approach to IT infrastructure planning. Here’s how this collaboration can benefit the client relationship:

Expert Insight into Emerging Technologies: For example, advancements in IoT (Internet of Things) devices, 5G connectivity, or AI-driven building management systems could dramatically change the IT landscape. By incorporating these considerations into the initial design, the estimator ensures the infrastructure remains relevant and capable of supporting new technologies as they become mainstream.

Tailored Recommendations for Scalability: This means that as the client’s needs grow—whether due to an increase in the number of users, higher data usage, or the addition of new devices—the IT network can expand without the need for significant structural changes. For example, building the capacity for additional server racks or designing the network with modular components that can be easily upgraded can save clients substantial time and money.

Strategic Planning for Cost Efficiency: One key challenge in future-proofing is balancing initial costs with long-term savings. An IT partner can assist estimators in identifying areas where investing in higher-quality components or more sophisticated systems upfront can lead to lower maintenance costs and fewer upgrades over the building’s lifecycle. This strategic approach to cost efficiency can be a major selling point for clients concerned about the total cost of ownership.

Enhanced Client Confidence and Trust: Estimators who are committed to delivering a high-quality, future-ready solution build confidence and foster trust, as clients can see that their long-term interests are being prioritised. This can lead to stronger client relationships and a greater likelihood of repeat business.

Mitigating Risks Associated with Obsolescence: Technology obsolescence is a significant risk in IT infrastructure. Estimators collaborating with IT experts can help clients mitigate this risk by designing systems that quickly adapt to new standards and technologies. This can include using interoperable systems that integrate with future technologies without requiring a complete overhaul or recommending flexible, cloud-based solutions that can evolve with technological advancements.

By providing strategic guidance on future-proofing, estimators position themselves not just as 'cost calculators' but as valuable advisors who contribute to a project's long-term success. Clients benefit from an IT infrastructure that remains functional, efficient, and compliant with emerging standards.

At the same time, estimators gain a reputation for delivering forward-thinking solutions that anticipate and adapt to future needs.

9. Coordination with other teams

Effective communication and coordination with architects, engineers, and other stakeholders are vital for integrating IT networking requirements into the project plan. Mark Waldmeyer
Lead Solutions Architect, emphasises that "Coordinating teams effectively is crucial to avoid misalignments that can lead to costly errors. Choosing vendors who are prepared to collaborate with each other is often overlooked. Without collaboration, a 'blame' culture can be created on a project."

10. Risk management

Cybersecurity is a significant concern when estimating IT networking costs. Estimators need to identify potential risks and incorporate cybersecurity measures into their plans. "Risk management in IT networking is about foreseeing potential vulnerabilities and preparing for them," says Mark. "For example, a security camera you installed is probably connected to the Internet, making it vulnerable to a cyber attack that gives hackers access to the building's network. Most smart devices don't come with security or firmware updates. They're normally quite dumb."

(For more information on the vulnerability of IoT smart devices, download our free guide; 'Green, healthy and cyber secure buildings'.)

Summary of estimating construction costs

Estimating costs for IT networking in construction projects is a complex task that requires a comprehensive understanding of both construction and IT networking. By staying informed about technological advancements, collaborating effectively with IT experts, and prioritising risk management, estimators can navigate these challenges successfully. 

As the demand for integrated IT solutions grows, estimators' roles in delivering accurate and reliable cost assessments become increasingly critical. For further guidance on your next IT networking project, reach out to OryxAlign (hello@oryxalign.com).