Effective managerial decision-making significantly impacts the economic outcomes of software development, particularly in public sector organizations like Trafikverket. This thesis examines the influence of managerial decisions on software development costs, focusing on key cost drivers such as project management frameworks, team size, resource allocation, and technology adoption. An analysis of Trafikverket's current project management practices highlights inefficiencies in handling dynamic software projects, which has prompted a shift towards agile methodologies and data-driven decision-making. To address these challenges,this study develops a tailored framework for cost modeling that integrates empirical data and theoretical insights. The framework provides actionable strategies for optimizing resource utilization, enhancing cost-effectiveness, and improving outcomes in public sector software development projects. This research underscores the critical role of modernized decisionmaking approaches in addressing the unique complexities of public sector software projects.