tsJensen

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Estimating Software Features and Fixed Feature Compensation from 8th Light

I just finishing reading a fascinating blog post by Paul Pagel of 8th Light called Fixed Feature. I recommend that you read the post and download and study the linked PDF entitled From Estimate to Commitment.

Companies willing to pay for software development on a time-and-materials basis are fewer and farther between. They don’t have the resources to monitor such work to assure themselves that the team is progressing as it should. Understandably, they cannot shoulder this risk. So they want their teams, internal and external, to give them a fixed bid for a project: fixed time, fixed cost, fixed features.

Pagel points out, “software is a craft with a close problem finding to problem solving loop.” In other words, we’re not always very good at anticipating problems in a development project until they are just about to happen. Sometimes we don’t even see them coming. We can minimize these events through continuous review and refinement of our processes and practices, study and evaluation of past performance versus estimates and the assumptions that went into those. Too often we do not take the time to do so, dooming ourselves to historical repetition.

Rather than attempting to created a fixed bid for an entire project, 8th Light, according to Pagel, estimates each feature using PERT and creates a price point for each feature. At the end of an iteration, they bill the client for features accepted by the client. This is an interesting approach to combining the desire for fixed bid pricing and Agile development.

Of course, this or any variation on fixed bid pricing requires that we improve our track record on creating estimates. If you visit our friends in Mountain View and search for estimating software development, you will find over four million results. There are tools and whitepapers and blog posts galore. But before you spend more money on tools or consultants, look to your own experience. Be willing to record what you’ve done, evaluate it honestly and boldly, and make adjustments based on what you have learned. Surely this will be less painful than blindly repeating the past.

Read Pagel’s work on this subject and let me know what you think.