New answers tagged

3

I'd like add one more option on the table. In many cases estimation isn't really necessary. Situations when it can be useful: You need to sync with other teams which depend on you You need to predict the budget and decide if the project (or a feature) is worth starting In any case, if you estimate there has to be some decision made based on the estimates. ...


6

Hat tip to Nvoigt, Nvogel & D. Espina - all good comments, with particular emphasis on D. Espina's "sometimes, knowing one of your team is overly optimistic, you simply add your own margins to their input." I'll just add one more frame to the question - this is a problem is in risk management. The core, fundamental responsibility of the PM is ...


5

Notwithstanding your approach and whether you are performing it properly, research the affects of planning fallacies. A planning fallacy is a specific form of Optimism Bias, where we have a tendency of under estimating adverse variables that could impact our performance and, therefore, we predict far favorable results than what is most likely. The bias ...


6

In Scrum the team aims to complete the sprint goal by the end of the sprint. It shouldn't be necessary to estimate day-to-day deadlines since the delivery date is always the end of the sprint. I suggest you could stop trying to lead, stop estimating and allow the team to self-manage. A team of three people is quite small however, and one problem may be just ...


0

The answer depends a lot on the industry/project size and type/and the organization. As others have pointed out, customers usually expect the vendor to provide a quote for free. There is nothing to do about it. However, how accurate/detailed is the quote and how it is structured can be negotiated. Good customers understand that discovering and detailing ...


0

I worked at a small vendor with a simple rule: We need clear requirements. If you don’t have clear requirements you can hire us to write clear requirements, and we know better than most clients how to do that. You pay for the service, but the end result is yours, you can take it to another vendor, or implement it yourself, or get a quote from us to implement ...


1

Usually the same way companies pay for their sales teams and advertising budgets: Out of their own profit margin, as a cost of doing business. The idea is that you spend $xxx,xxx and this brings in business that generates more money than it cost to acquire it. The contract itself usually has a fairly hefty 'margin' baked into it precisely because it has to ...


1

First of all, always there is a proposal that you should prepare to show that you have the abilities to do the customers' requirements as well as they want. And most of the time you and your team have a sense of these abilities and you can put your comments on the time schedule and cost of the project. These kinds of preparation expenses are on the vendor's ...


2

As already answered, at some level this depends on what the sides agree upon, and there are no laws or rules governing this. Considerations that affect the decision of who pays, include: Will the quote be a simple number, or will it include the entire research you described? If you're delivering something useful, it's easier to ask to be paid. That said, ...


11

My company will sometimes engage into a "discovery" phase where we will spend 20-80 hours detailing the exact requirements of the project and determining the cost. We do this if we believe the requirements are not well documented enough or the project is so large that being off on the quote plus or minus 10% could mean 10,000+ dollars. The rate at ...


3

These costs are (usually) covered by the vendor. This is inherent risk, which can bankrupt small, specialized startup, especially if it enters the market under-capitalized. As a side note, this was for example a reason my university lab stopped working directly with clients seeking customized solutions. We only work with solution-providers who do this task ...


8

Pre-sales work is normally assumed to be at the vendor's expense, but usually I would expect the activities you describe (analysis and design) to be part of the work the customer pays for after the contract is signed rather than before. Detailed analysis and design requires extensive commitment and work from the customer as well as the vendor. The price you ...


18

This depends a lot on how the two companies involved in the contract negotiation operate. You have to realize that there is always a cost of doing business, and somehow you have to recuperate it from the profits you are making. Think about your daily work, for example. You might work for 8 hours a day, but possibly you are productive and producing an actual ...


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