Sunday, October 17, 2010

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caution in dealing with rough cost estimates

I have often experienced the situation that I have are a tender on the table, where the customer wants to have a so-called "full service" project offers. "Full Service" in the field of e-business "in this case: conception and design of a new e-business solution, then the implementation the solution and last but not the operation of this solution. That will now all be packaged into an offer and are provided in accordance with numbers.

But it is quite difficult to assess the implementation of a solution, if there are no concepts. There is the possibility to leave, are responsible for a rough cost estimate based on experience. This has the advantage that the client will receive an overview of the cost of complete service, and we have the ability to implement cost design has been completed to verify again.
That sounds all very good and plausible ... BUT: The client nailed one in the Rule on the amount of rough cost estimate fixed and then expected that the reaction can be carried out in the estimated budget.

Thus begins the Scope Management at a very early phase of the project. Here are some tips to make the implementation costs, the rough cost estimate does not exceed:

  • The implementation effort can be controlled through design. If the customer has a sudden new requirements or changes the scope may already be noted in the concept that the impact has the implementation effort.
  • should be considered in the design with smaller budgets, that the Deluxe version is designed, but the version that can be implemented with the existing budget as well.
  • If the implementation costs are adjusted according to design must be completed, then the PL will argue exactly how it came to the added expenses. More effort must be transparent and comprehensible for the customer.
  • it is helpful if you have defined at the start with the customer what the exact trade-off is of the project: If a deadline, the highest priority, cost and scope are flexible. If the budget priority, deadlines and scope are flexible. If the Scope priority, the budget and the deadline is flexible. The Trade-off will be during the design phase of the customer and the design team kept in mind.
  • case will be developed during the design phase of a design must be scrutinized, that creep in the design is not new features. Namely, the customer has taken the concept and design, that is also pinned down. Even if they are not conceived in the design any new features have crept, the customer expects that he'll get it. This is also the customer at the Scope's guide.
For the customer it's always a bitter pill if he has more costly in the end. For this reason, the transparency and the constant Communication in this regard extremely important during the design phase.

Conclusion:
rough cost estimate: yes, apply in any case, but only in the light of the above.

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