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southernSCOPE - Avoiding Software Budget Blowouts

The Victorian Government has developed a new project management approach to software development called southernSCOPE. It can help your business avoid software budget blowouts which slow your business down.

The Problem

The majority of software development projects have two things in common. They regularly blow their budgets and rarely meet time deadlines.

These problems were documented in The Standish Group's CHAOS Report, which found that 32% of projects terminate before delivery and only 11% are completed on budget. Of the remaining 57% of projects that are completed, the average budget overun is 87%.

The report also found that large companies with large software development projects had the lowest chance of completing a project successfully.

A Solution

The southernSCOPE method has already been trialed and refined on a number of government projects over the past three years.

A review of its effectiveness has found that projects using the southernSCOPE approach:

  • complete successfully
  • provide customers with software that meets their needs providing a high level of customer satisfaction
  • cut the average budget over-run to less than 10%
  • provide software value-for-money within the top 25% of industry best practice.

What is southernSCOPE?

Previous approaches to paying for software development were either based on a fixed price proposal using specified requirements or paying an agreed rate for inputs such as time and materials.

The southernSCOPE method is an alternative approach.

The approach is similar to the building industry developing costings per square of floor space, the road construction industry costing projects by the kilometre, magazines paying freelance journalists by the word or builders subcontracting painters on a dollar price per square of house to paint.

southernSCOPE now allows businesses to take the same kind of approach to software acquisitions. It allows project managers to set a price based on cost per function point, rather than on how much time has been spent on the development.

A function point is a unit of measurement that puts a number to the amount of functionality delivered to the users by a software application. Function points are to a software application what squares are to a house. Whereas the average house is 15 squares the average software application is 500 function points.

How does the method work?

These are the eight steps to the southernSCOPE method.

1. The customer identifies that a need exists to acquire application software and engages a 'scope manager'. The scope manager is an independent person who specialises in software measurement.

2. The scope manager performs a preliminary function point count and provides an early but sound cost estimate and a realistic development timeframe for the project.

3. The customer prepares a short document outlining the need for the software and the constraints of the project and invites proposals to develop the software.

4. The customer selects the best proposal and engages the successful developer with payment for the software based on the dollars per function point of the software delivered.

5. The development begins with a phase of analysis that produces a Requirements Specification.

6. The scope manager conducts a function point count on the Requirements Specification. Using this count, the customer decides exactly what functionality will be needed to produce the project outcomes while meeting the budget and the delivery date.

7. During the project, the scope manager ensures changes to the scope are understood and that the customer and the developer agree upon their price impact.

8. At the conclusion of the project the customer makes payment to the developer on the basis of software delivered plus the agreed changes.

Contact

To provide general comment, suggestions for improvement or to obtain more information please contact: terry.wright@dpc.vic.gov.au

Further Information

For further information please access the resources listed for you below

 

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Added: 19 December 2005 Page views: 11,314 Rating: 0.0 Votes: 0
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Last updated: 30 November 2009