Fair and Accurate Pricing with Function Point Analysis
When you're outsourcing information technology project
management, pricing calculations can seem closer to voodoo than an
exact science. And the vague pricing may not be accurate at the end
of the project. Research shows over 70 percent of IT projects come
in over budget, which means your carefully constructed plans could
be blown out of the water if you're not careful.
How can you lock in accurate and fair pricing on the front end
of information technology project management?
The best tool for estimating information technology project
pricing is called Function Point Analysis. This sizes a project
based on the functionality delivered, not just hours worked. This
provides a consistent metric for project scope and pricing.
Function Point Analysis keeps information technology project
management on both sides aware of pricing logic, and prevents
costly miscalculations. Projects using Function Point Analysis
consistently meet budgets and timelines within 5 percent of
estimates, setting a very high standard for accuracy.
Function Point Analysis was developed in the mid 70s by Allan
Albrecht at IBM, and has since become a respected standard within
the IT community, used by companies such as AT&T. It is a key
element of the Nimble Methodsm, our unique blend of IT practices
that guarantees we can deliver projects on time, on budget and on
target.
Meeting project budgets with function points
Function Point Analysis lays out the details behind project
estimates in a matrix, breaking down project components into
transactions and files. Complexity values for each element allow
you to see the relative difficulty of executing each function
point.
By demonstrating the individual components of functionality
delivered, you can visualize pricing decisions easily, and decide
which aspects of the project are truly crucial. This also helps
highlight missing functionality points during the discovery phase
of a project.
Function point analysis allows you easily visualize how change
orders would affect the cost of information technology project
management. Change requests show up as detailed transactions and
files within your overall project structure. This allows precise
evaluations of pricing and schedule adjustments required for each
change.
Depending on your budget and timeline, you can use this
information to break the project into phases to spread the changes
over a longer time period.
Informed decisions on information technology strategies
With the details that function point analysis provides, you can
easily understand the costs related to information technology
project management. Firms providing quotes with function point
analysis may not always be the lowest bidder, but their bids will
accurately portray the final cost of a project.
If you demand this methodology in pricing, you can approach
projects with confidence that you will get exactly what you
want.