1©2010 BP3 Global, Inc

“Fixed Effort”

A different way of looking at Time and Materials projects

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Review the Familiar: Fixed-Price

Typically: Fix scope prior to the bidding process

Deliver stated scope within budget

Change-order process

Paying for deliverables, not actual time/hours worked

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What are the Key Risks in Fixed Price?

Wrong requirements delivered (fixed too early)

Change-order process can result in cost overruns despite fixed-bid

project

Financial risk accrues primarily to the vendor

Risk of project failure accrues to both customer and vendor

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Review the Familiar: Time and Materials

Typically: Scope can change, at additional cost to buyer or with tradeoffs

against previously agreed upon scope

Light change-order process

Paying only for actual time/hours worked

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What are the Key Risks in T & M?

Risk of cost overruns with scope changes

Timeline risk due to scope changes

Financial risk accrues primarily to the customer

Risk of project failure accrues primarily to the customer

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So what is Fixed Effort?

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“Deliver variable scope on a fixed budget.”

How is that possible?

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Prioritize, Prioritize, Prioritize

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Stop thinking “Change Order”

Stop thinking “Requirements Document Sign-offs”

Divide scope into time-boxes or playbacks

Prioritize the list of scope items / work items

Prioritize anything new or revised against existing list

Finally: work on the highest priority stuff first.

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Respect the Budget

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Assume the budget will not be adjusted

Go to production within the budget.

Use the production budget constraint to motivate prioritization.

Person-Hours are limited within a tight range.

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Addressing the Risks

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Budget: Fix the Budget. Refuse to accept scope beyond budget.

Scope: Highest priority items first. Prioritize everything.

Requirements Risk: Allow for more accurate requirements by forcing prioritization of all scope items and scope changes.

Timeline Risk: With fixed budget, we have limited range of calendar dates.

Project Risk: Shared responsibility with IT and Business (and Vendors)

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So What is Fixed Effort?

Delivery of the highest priority functions within fixed budget.

What if my project is T&M?

There’s no reason you can’t treat a T&M as Fixed Effort by respecting the

original budget of the project and forcing prioritization discussions.

What if my project is Fixed Price?

Push to get the Change Order process to become more of a Prioritize-and-

replace process - removing existing scope to make way for scope changes.

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Related Concepts from the startup world

Minimum Viable Product

• Laser focus on highest priority features, and as few bells and whistles as possible • Find the key features that make the MVP compelling, rather than re-implementing all the

existing features.

Lean Startup

• Laser focus on preserving capital (budget) • Getting as many “turns” (releases) as possible out of the budget in order to benefit from

feedback cycles.

Agile Development

• Many of the techniques within Agile development overlap with the idea of a Fixed-Effort

project.

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