Fixed Priced, at what price?

Life in the Indian software industry is becoming more and more difficult. These days there has been tremendous emphasis on going to the fixed price model from the time and material model. Most IT companies are hard sold on this model and the client cannot believe his luck. He needs to define a price and the onus is on the IT service provider firm to meet the delivery date and delivery requirements (which constantly change during the project execution phase). There is an option of raising a Change Request but that is dependant on the strength of the Project Manager’s spine to get extra money thru Change requests.

Let’s look at the positive side of the FP model. IT Company is guaranteed of a source of income for a given duration. The company can decide on the number of resources (typical IT word for human beings) it wants to put on a given project. The company decides people count and gets a fixed income sounds rosy doesn’t it? Not really. All these niceties depend on a very critical component……… estimation.

IT has been around for some time but I do not think personally any one has come up with a perfect estimation template that can take into account ever changing client requirements, design and customer Critical To Quality success criteria. Ask a software engineer, if he had 100% that’s a mirage say 80% of requirements defined. If the customer was sure of what he wanted. Now who does, and what methodology is used for estimation. That’s where things become more and more interesting.

Normally it is the IT manager who is light years away from the realities of coding that does the estimation. Even if a developer comes up with estimates it is what is called as a ball park estimate. We are in luck if it is closer to target amount of efforts required. If the developer manages to inflate the estimates, the powers that be come up with USPs like account breaking opportunity etc to get the estimates down. There are also those smart aleck architects that say on which project you got requirements at the start of the project? I thought we were supposed to take care of this uncertainty and factor it in our estimations.

Where does that leave the poor developer? Behind his computer screen day and night on week days and week ends trying to get things to the all powerful entity called client’s satisfaction.

This blog is dedicated in its entirety to the poor slogging software developers is all IT companies. He has my unending admiration and respect for his patience and perseverance and ability to maintain sanity in such pressure cooker situations.