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4

All in all, I really would like to understand what Budget Cost actually means compared to EAC and the Opportunity Cost for example and who is responsible for calculating it? Budget Cost is essentially the estimate of total project costs at the start of the project. Since this is an estimate it can (likely will) be somewhat different than the Cost of the ...


3

"Outcomes" Aren't Synonymous with Fully-Fixed Constraints In Scrum, the burn rate of each iteration is (relatively) fixed. The flexible sliders are scope and schedule. So, "outcome-based pricing" is certainly possible so long as you can adjust scope and schedule, but it isn't feasible if you're abusing the term to mean "fixed price for fixed scope." If the ...


2

I recommend you to set it per sprint. That way, you can make sure the customer doesn't expect more than what is agreed in the sprint planning, and you can set the price based on the expected amount of work from known tasks. It's not an axiom, so of course you can negotiate any alternatives that you are OK with.


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I have never seen that particular formula to describe the budget. In the U.S., the Defense Acquisition University published the "Gold Card" to describe the various dollars of budget for Earned Value Management. Essentially, these are the components that make a contract price: Your Performance Management Baseline (PMB) consists of the costs required to ...


1

Scrum should be focused on delivering outcomes, so yes, it is applicable. I think it would be very important to have a common understanding of what "Done" is so that you aren't charging for something the client can't use and they aren't constantly moving the goal posts. Past that, it should be a perfect fit.


1

The answer to your question needs to occur before you provided pricing. Within the contract, you would indicate who owns the what after the what is built. And then based on that you would price its development accordingly. So I would advise you not pushing forward the price at which you arrived until you answered this question with your client and get it ...


1

A fixed price contract typically works on shifting cost risk from buyer to seller: In a T&M contract, the client has the budget risk of the project. The client is generally less experienced in doing IT projects, so the risk is high. He will estimate a budget contingency of e.g. +100%. In a Fixed-price contract, the supplier is responsible for completing ...


1

I've been in similar situations. My experience has been that when you talk about it, customers usually have at least an intuitive understanding of the issue, but will look for any way to avoid the announced cost. They have been working with you for years, have gotten accustomed to a certain rhythm of deliveries, have a feel for how much something costs and ...


1

The Client is coming to you to solve a problem, and if you have already committed to the work then it is disingenuous for you to want them to update their framework just to make your developers' lives easier, especially if there will be no value added to them, and just an extra expense - I'd tell you guys to pound sand. The only way it would even be okay ...


1

I am making an assumption here, that your client owns the software you have built for them. If that is the case, you don't get to make the decisions about what work should be done in the software, they do. Deciding to make platform changes to suit your developers and your organisation and then expecting them to pick up the bill for that is plain wrong. ...


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