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Author Topic: software project costs  (Read 6342 times)

rescobar

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software project costs
« on: September 12, 2005, 02:07:19 pm »
Hi
How do you make a quotation for a client who asks for a software project?
It is not suppossed that software projects are iterative and incremental?
How to know in advance how many use cases are we going to have in order to quote our client?
Any idea very welcome!
Regards
Ramiro

Sergio Escobar
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thomaskilian

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Re: software project costs
« Reply #1 on: September 12, 2005, 02:12:31 pm »
What about specification? If the client doesn't exactly know what he needs/wants then offer to write a specification. You can make a (Business) Use Case Analysis and then estimate the whole project cost. I'm pretty sure that your client won't accept a "let's see what comes" deal ;)

rescobar

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Re: software project costs
« Reply #2 on: September 12, 2005, 02:17:38 pm »
But what if your specification is very general and in the details you have more job than calculated initially?
Do you know where to get a white paper or something to lear how to estimate?
Thanks in advance
Sergio Escobar
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thomaskilian

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Re: software project costs
« Reply #3 on: September 13, 2005, 12:54:13 am »
There are a lot of books about project estimation but certainly the best one is your experience (and your stomach). There are a few simple rules:
- don't promise anything you can't estimate
- never start a project with a promise "it will succeed"
- gather as much information ahead as possible
- convince your client to start with a specification to make his vision clear. Offer to charge the cost for that against the complete project cost.

Having enough information you should make a risk estimation by checking all requirements and add 10%/20%/50% for good, undefined, bad feeling (negotiation base should start from top).

If you still don't have enough information, cancel the whole thing - except your client will pay you by hour. In that case ;D

Paolo F Cantoni

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Re: software project costs
« Reply #4 on: September 13, 2005, 01:49:40 am »
Do everything that Thomas says and then...

(Paraphrasing the Digital Equipment Corporation Project Management Handbook (from the early 1980s)....)

The last three items on the Estimation sheet were...

Does this project involve new technology?
If yes, double the last estimate

Does this project involve a  new business area?
If yes, double the last estimate

Has this team worked together before?
If no, double the last estimate.

I found this process deadly accurate!  ;D

Take from this what you will...

HTH,
Paolo
Inconsistently correct systems DON'T EXIST!
... Therefore, aim for consistency; in the expectation of achieving correctness....
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Helsinki Principle Rules!

rescobar

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Re: software project costs
« Reply #5 on: September 13, 2005, 05:05:22 am »
Thank you all!
Sergio Escobar
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davisford

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Re: software project costs
« Reply #6 on: September 13, 2005, 09:40:56 am »
I agree with Thomas & Paolo.

The only thing I might add is that there are more formal ways to go about this, but it does take some time and investigation to learn them and apply them well.  I do still like Barry Boehm's Constructive Cost Model (COCOMOII): http://sunset.usc.edu/research/COCOMOII/cocomo_main.html

If you are interested, and have the patience/time, you will find a lot of information on that web site on how to go about estimating the cost of a software project in a formulaic sense.

As Thomas points out, you do need some kind of requirements/spec in order to do any kind of estimation at all...unless the project is trivially small.  Do the thing in phases, where you charge them some fee to do engineering discovery -- eliciting requirements, and capturing them in a specification first -- charge them for this work.  Then you can go to the next phase..if you follow COCOMO, and you have no lines of code to count, you can do function point analysis -- your mileage may vary.  I am very interested in if anyone has applied use case points at all.  I see EA even has support for them.  COCOMO II also takes into account those risk factors that Paolo points out.  There is a free excel spreadsheet that you can download from there to help you through it.

Good luck..hope that helps.

rescobar

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Re: software project costs
« Reply #7 on: September 13, 2005, 10:55:27 am »
Thanks again. I wil tell you how things go on.
Sergio Escobar
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thomaskilian

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Re: software project costs
« Reply #8 on: September 13, 2005, 11:12:42 am »
Quote
... I am very interested in if anyone has applied use case points at all. ...

You may read here and here. Honestly speaking I have not used metrics too much (too few projects). Bruno is obviously not in at the moment  :'(

sargasso

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Re: software project costs
« Reply #9 on: September 13, 2005, 03:49:07 pm »
Paolo forgot the last line:

After you have made all the above adjustments double the estimate.

Seriously, if you have no experience in sizing and quoting then I'd suggest you and your clientr start by reading the Chaos report, available from http://www.standishgroup.com/sample_research/chaos_1994_1.php
it may be enlightening or may scare you/them enough to get a proper project mandate and costing done.

bruce
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mikewhit

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Re: software project costs
« Reply #10 on: September 14, 2005, 01:21:26 am »
Never thought I'd quote Rumsfeld in a favourable context, but it's not the work you know about that pushes up the timescales - it's the unknown unknowns.

All this doubling and adding 50% shouldn't really be necessary if you can be certain [;-)] that your requirements describe exactly the work to be done, and you have experience in all those subject areas.

However, any different way of doing things does add a potential complication, and you often end up forgetting about something that needs to be done.

I find it helps to retain the credibility of your boss (if it's an internal project) to indicate those items where there are "unknown unknowns". Then if she's experienced , she can mentally add in the slack there.

As soon as you run up against another task, you need to add it in - you should quantify, or at least itemise, every single job that stands between you and project completion, even if you can't put a figure on every one.

Those you have experience of will be much more solid than those where you are a novice; you are also much more likely to know the "hidden aspects" of known areas.

You should by now have realised that project estimation is quite a job in itself, even if you don't get the business, you have to put the work in, maybe several days worth, if you're being serious, and write it off (but reuse the experience gained - file it away to save you work the next time) if you don't get the order.

But your rates need to include costs for the work involved in quoting, with a percentage to also cover work you spend time estimating but don't get, and time between projects, if any.
« Last Edit: September 14, 2005, 01:37:26 am by mikewhit »