1. Fixed costs projects
Practical experience

2. Agenda
 Pre-sale
 Planning
 Implementation
 Finishing
 SCRUM
2

3. On which phase a project
manager is starting a fixed-cost project?
3

4. Pre sale
1. Pre-sale
 Needs
 Estimation
 Tips
4

5. Understand needs
 Learn
 Ask
 Draw
 Concept
5

6. Learning of customer needs
 The best way – face to face meeting
 Or video conference
6

7. Ask as much as possible!
 Ask as much as possible
 Show examples
7

8. Make and present mock-up’s
8

9. Project concept
 Looking for existed solutions (Goal: cost reducing).
 Prepare a few options.
 Prototype
9

10. Estimation
 Do not forget
 Gaps in specification
 Risks
10

11. Estimation: Do not forget
11

12. Warranty effort
12

13. Buffer for small changes
13

14. Effort for meeting and ongoing
issues
14

15. Effort for documentation
15

16. Pre sale effort
16

17. Example
17

18. Gaps in the specification
 Assumptions
 “Will be implemented like …”
 Implement as T&M part.
 Notice:
 Bug fixing is also part of T&M!
 Additional management for managing T&M part
18

19. How to handle gaps in the
specification ?
 Example of assumptions:
 We assume that workflow module should contain about 10
screens with complexity like “email configuration screen”
 Integration with python will implemented using simple
interface: each python script should be presented like a
function with hardcoded input and output parameters.
Through admin part it is only possible change body of the
script but not the interface. In the price is included
integration of 2 scripts
 Will be implemented 2 reports with complexity like “Insured
persons report”
19

20. Risks
 List of risks:
 Description
 Probability
 Influence
 Mitigation plan
 Trigger
 Migration plan
20

21. Risk handling
 Share with the customer
 Include in price
21

22. How to include risk in the price
 Calculated risk cost (Rc)
 Probability (P. From 0 to 1)
 Risk reserve (Rr)
 Rr=Rc*P
22

23. Tips& tricks
 Team/duration
 People involving
 Fixed cost magic
 Commercial correction
23

24. Project duration/team
 Split project on sub projects (as well sub-contracts)
 Build small teams
24

25. People involving
 Involve on pre-sale stage people who will take a part in
the project implementation
25

26. Magic multiplier
 Magic multiplied based on experience
 For example:
 Effort=Estimated effort(dev)*2,2
 0,3 – Estimation error
 0,4 – Testing
 0,3 – Management
 0,2 – Communications etc.
26

27. Commercial correction
 Effort -> $
 Stomach feeling
 Consulting with sales department
 Is it possible with final amount to finish the project?
27

28. Project planning
 2. Planning
28

29. Communication plan
29

30. Time buffer before milestones
30

31. Reaction time of the customer
31

32. Acceptance criteria
32

33. Invoicing plan
 Lineal distribution
 Payment after milestone delivery
 Payment after project delivery
33

34. On implementation
3. Implementation
 Risk review
 “Small changes”
 Change requests
 Reporting
34

35. Risks
 Plan of risks analyzing
 Update involved people (customer, sales, supervisor etc)
35

36. Small changes
 You have a buffer for them
 Efforts of small changes must be controlled
 Customer always needs much more
 Use batching strategy
36

37. Change requests
 Definition of CR must be created and agreed
 Don’t show real spent effort for CR (common JIRA)
 Strategies:
 Include
 Postpone
37

38. Including strategy
 The customer will be noticed concerning duration and
budget changes before implementation
38

39. Important notice
 Effort spent for CR clarification will be included in final
estimation
39

40. Postpone
 CR’s cold be collected and realized as a minor release
 It is bad idea to implement CR’s separately
40

41. Important notice
 Estimated scope of work must be described in CR
41

42. Notice
 Use the similar approaches as on pre-sale stage:
 Assumptions
 T&M
 Like example
42

43. Reporting
 Should be introduced impact report
 You will be sure that the customer understands real
deadline of the project
43

44. Project finishing
4. Finishing
 Acceptance
 Maintenance
 Experience sharing
44

45. Acceptance
 Should be defined acceptance criteria
 The customer should have restricted time for acceptance
 Should be defined responsible persons from customer
side
45

46. Maintenance
 Right time for a maintenance proposal
 Do you want additional benefit? Organize resources in the
most effective way!
 Propose a few options of reaction time and level of
responsibility
 Jira
46

47. Save knowledge
 The risks will be reviewed (what happened/what not)
 Update internal knowledge base
 Will be defined and shared the best practices
 What components of the project could be reused in
another projects
47

48. Bonus
 SCRUM+Fixed cost=own experience
48

49. What works?
 Sprint
 Daily scrum
 Sprint planning
 Sprint review
 Retrospective
 Product Owner Should be introduced proxy PO
 ScrumMaster
 Product backlog
49

50. What works?
 Sprint backlog
 Burn down
 Planning Poker
 Story points
 Definition of Done
 Velocity
50

51. More information here…
We would be happy to
answer any of your
Questions?
51