Software Development: Fixed Price Model Features

Software Development:
Fixed Price Model
Features

Offshore Software Development Company
from Eastern Europe (Belarus)

Professional IT development

www.belitsoft.com

WHAT IS FIXED PRICE MODEL
Fixed Price (FP) model of outsourced software development usually is used for projects which
have the following initial characteristics:
clear scope of project
complete set of requirements
client and service provider know well each other’s duties and capabilities, skills.
Having this information before the project
development start allows the client to get
certain deliverables according to a set of
milestones during the project implementation
process. This helps to gain confidence and
provides control over the process.
As a result the complex of these elements
leads to a successful project completion.

Software Development: Fixed Price Model Features | Outsource to Belarus | www.belitsoft.com

INITIAL STAGE. SCOPE OF PROJECT
Any project starts with Scope of project definition. This is the initial stage of a project
implementation. Any mistakes made here can be fatal afterwards. At this stage client and service
provider should discuss and agree upon the following:
business needs the client wants to satisfy with this project development
incorporation of all business needs into the project. Should any vital business goal be missed
during the scope of project making, it can become an obstacle for the client to achieve the main
business goal in general.
key controls needed for successful project implementation
verification of availability of all necessary controls


INITIAL STAGE. SCOPE OF PROJECT
For example, a client needs a software product which will bring him profit. The service provider
should collect all business aims of the client and make sure that all necessary IT experts and
services are available to make this product development a success.
Besides Scope helps to understand whether Fixed Price model is the right one. Fixed Price means
that all business goals, deliverables and features to be implemented in the project are known and
confirmed before project development launch.
In case client has no possibility to define all business goals at the stage of project planning it
worth thinking about other project development models to avoid mistakes.


INITIAL STAGE. SET OF REQUIREMENTS
After client and service provider have discussed business aims and controls of the project, it’s
time to look at the Set of requirements. A Set of requirements may include:
Features list of the software
Desired duration or time frame for the project implementation & Approximate price.
Often Fixed Price model is used for projects which have a rich features list at the stage of a
request receiving. On the other hand service provider assists client to make Features list if there
is such a necessity.
If a client has little experience in software projects development, an example of a Features list
document can be send to fill in:
# & name of a feature

Description

1. Registration.

Users can register with username and email.

2. Newsletter.

Users can subscribe for newsletters in a form with email.

Later this document is being discussed in detail and extended with necessary information
together with an account manager or a project manager of the service provider.

INITIAL STAGE. SET OF REQUIREMENTS
Desired duration or time frame of the project implementation and price are very important
points. They influence much the following:
duties sharing between the client’s team and the service provider’s team
choice of technologies to implement the project
project implementation team building. Usually the faster client wants the project to be
completed the more experts are engaged into the project and the higher level of experience and
skills of the development team.
As a result, the budget for the project varies depending on all the points mentioned above. For
example, budget may be influenced by the experience level of the team members (Junior,
Middle, Senior as far as engineers’ qualification is concerned).


PLANNING
After the initial stage is complete, client and service provider knows Scope of the project, List of
Features to be implemented, preliminary project duration and price, effective Plan of the project
development should be made. Here are usually* included:

* Each company has its own process, so this is a major list of possible steps before project development start.


VISION DOCUMENT
Vision document is an essential part of projects with approximate duration over 500 hours.
Vision document is a file with some pages that includes the main description of the project,
Features list, key risks, assumptions, and architectural concepts.
The structure has the following items*:
Introduction
Business Needs/Requirements
Scope & Limitations
Product/Solution Overview
Major Features (Optional)
Assumptions (Ideas how to accommodate uncertainties and their unexpected outcomes)
Other Needs

* Each company has its own process, so this is a major list of items included in the Vision document.


VISION DOCUMENT
On client’s approval Vision document can be omitted for small projects below 500 hours.
For example, our analysts take about 6 hours on average to make a Vision document for bigger
projects over 500 hours.
Though Fixed price project development model can be used for a project of any size, the smaller
the project, the less risks may occur. To reduce risks Vision document may be extended with
additional parts.
Often a Product prototype is applied as a part of the Vision document or as a separate
document. Prototype is a set of interfaces of the planned product which can be a corporate
system, website or an application for mobile devices or web.
Prototyping is a necessary part of complex products, such as scalable corporate system or big
website with numerous pages, filters and features.


ROUGH ESTIMATE
Rough estimate should be done for each project. This is a document that gives preliminary
information or approximate estimate of project duration and its price. It’s done on the basis of
the Features list and the Vision document. It helps client and service provider understand the
preliminary duration and budget of a project.
Usually Rough estimate has both minimal and maximal number of hours and price as complete
project details are not available in great detail. Having possible project budget and duration at
hand helps the client to answer such questions as:
are all features really necessary to achieve business goals
should new features be added to achieve business goals
is the planned budget appropriate to implement the project with all desired features
should the project be split into smaller sub projects to have better control over business aims
achievement
is the Fixed Price model the right one to be used to implement the project
Rough estimate is a compulsory part of any project developed using Fixed Price model.

SOFTWARE REQUIREMENTS SPECIFICATION
Software Requirements Specification (SRS) is the most important part of the project planning.
This document defines every feature of the project in great detail.
SRS is based on the Features list and Vision document and provides details for each feature. SRS
usually has four sections:
Glossary
Use Cases
Functional Requirements
Non-Functional Requirements
Should the client send a request with a ready SRS document to the service provider, it can save
much time necessary to implement the project. The more features are required, the longer the
period of SRS document creation.


SOFTWARE REQUIREMENTS SPECIFICATION
The difference between Vision document and SRS is that the second describes whole process of
a product operation and use in great detail. For example:

User can register for newsletters

Features list:
User can subscribe for
newsletters with email in a form.

SRS:
User subscription for
newsletters. Steps:
1.User enters email in the form.
2.Confirmation email is sent to
the email.
3.Newsletters are sent to the
confirmed email. Etc.

Everything described in the SRS document is discussed with the client or the client’s team. After
SRS has been approved, service provider makes final budget, schedule and risks list.

FINAL BUDGET & SCHEDULE
Final Budget is calculated using all information provided in the Scope, Features List, Vision and
SRS.
Budget covers all costs of the project:
project management
project architecture and project design
project development
project testing and bug-fixing
project deployment
project support (on demand)
Budget can be changed only when the SRS is changed.
After Final Budget has been calculated service provider prepares Final Schedule. Schedule has
objectives (features of project), time frame and number of hours necessary to implement every
objective. Schedule splits the whole project into Milestones. Milestone delivers a set of the
project functionality to estimate using Quality Standards and other acceptance conditions.

FINAL BUDGET & SCHEDULE
Milestone is an event to mark the end of a certain project development stage. It is a part of
project management which serves to check whether the project is being developed on schedule
or not.
Milestones allow client’s and service provider’s teams to check the project health and diagnose
early schedule problem and what features are critical to be implemented to achieve main
business goals on schedule.
This dashboard of the project helps to see progress. Usually Milestone check has the following
structure:
Objective of Milestone
Roles and responsibilities (for client’s and service provider’s teams)
List of activities and features to be ready within the Milestone with cost and duration
Demonstration to the client
Comment made by the client during Milestone check
Having results of Milestone check client and service provider decide whether project
development is done on schedule and what steps can be taken to improve either schedule or
Features list.

RISKS LIST
Risk is a possible incident which can influence the project Schedule and Budget. The project team
prepare list of Risks which is approved by the client. Usually Risks list include:
List of risks
Level of importance for each item in the Risks list
Plan what to be done when Risk case occurs
Sometimes when the Risk occurs it can increase the Budget and change the Schedule. Risks
identification is a very hard process. It starts with Assumptions making in Vision document
during initial project stage. Client can see possible uncertainties in the business goals and
Feature list, their possible outcome and decide which Risks can be taken and which should be
eliminated before project development start.
The presence of Risk list helps to reach success of the project.


QUALITY STANDARDS
Quality standards classify and describe issues and problems possible to occur during the project
development. Problems may be as follows:
Blocker
Catastrophic defect that causes total failure of the software or unrecoverable data loss. There is
no work around. In general, a severity 1 defect would prevent the product from being released.
Example: defects that cause the system crash, corrupt data files, or completely disrupt a service.
Critical
Defect results in a severe impairment of functionality. Work is done but unsatisfactorily. In
general, it is not recommended to release software with such a defect. Examples: following
certain steps software may generate an error message. User can click Ok on it and continue with
whatever user was doing with no harmful effects.
Major
Defect causes failure of non-critical aspects of the system. There is a reasonably satisfactory work
around. The product may be released if the defect is documented, but the existence of the defect
may cause customer dissatisfaction. Example: a non-Client Financial Report is not recognizing an
option correctly, but if a filter is set, the report can be generated with a proper output.


QUALITY STANDARDS
 Low
Defect of minor significance. A work around exists or, if not, the impairment is slight.
Generally, the product could be released and most customers would be unaware of the
defect's existence or only slightly dissatisfied. Example: A button or button set is slightly
off center on a data screen, or the problem is purely cosmetic and not easily
recognizable.
 Trivial
Enhancement request or design issue. These should probably be coded as Suggestions or
brought to the Design Team.
Other Quality standards and requirement, acceptance conditions are negotiated for each
project.


AGREEMENT SIGNING AND PROJECT START APPROVAL
After initial and planning stages of the project have been passed successfully, the client and the
service provider sign the Agreement.
It means that the service provider and the client have reached understanding, all possible causes
that may prevent the successful development of the project have been addressed, and the
project can be completed on terms and at fixed price for sure.
Finally project development starts according to the conditions stated in the Agreement.
Fixed Price model projects can include all, several or one of the following services:
Software architecture and design
Software development
Software testing
Software maintenance
Other services on demand
Sometimes it’s not possible to get a realistic final budget and duration, for example, the project is
big, client and service provider have the clear Scope for several successive stages, farther stages
are yet to be defined. In this case project can be split into several sub projects too.

Software Development: Fixed Price Model Features

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