Author: Paul Dittmann

Why Traditional “Fixed Bid” Software Projects Usually Fail

Paul Dittmann, Tuesday, December 15, 2009 @ 7:15 am

By now almost everyone has figured out that traditional fixed bid doesn’t work for software development projects, especially where effective, intuitive user interaction is a significant component of success.  Over time there has been a lot of effort devoted to finding the underlying reasons for project failure.  The Standish Group Chaos Report for 2002 found that 45% of features developed were never used, their 2008 Chaos Report found that typical software projects come in at 189% of original estimates (there is an obvious correlation there), and many studies over the years have concluded that an uncomfortably small percentage of development projects are viewed as meeting or exceeding expectations or providing competitive advantage.

Hidden implications of “fixed bid”

Although you need to provide a target budget to get projects approved, “fixed bid” for application development starts of with a faulty basic assumption – that user, functional and system requirements are fully known and documented in a way that enables efficient development. True fixed bid also implies “waterfall” development and two assumptions: 1.) you have completed a thorough, efficient design phase, and 2.) requirements won’t change during the development process. Neither of these assumptions are realistic.

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Software Development

Thinking about starting a SaaS or eCommerce business?

Paul Dittmann, Monday, August 24, 2009 @ 7:15 am

I’m approached by people every week that think they have a great “new” idea for a web startup.   The ideas run the gamut from those that aren’t yet technologically possible to those “new” ideas that I have received 10 similar calls on over the past year.   Here are some things to consider:

Think about the business need and revenue model first.  Who are the users (your “customers”), what is the application or service worth to them, how many of them are there, etc.   If you can’t envision generating a million dollars plus a year in SaaS (Software as a Service) revenue or in gross margin for an eCommerce business, it’s probably going to be an expensive hobby, not a business.

Make sure you can create a sustainable competitive advantage.  What are your differentiators?  If you have to say I want a site like “xxxxxx”, you are probably starting off on the wrong foot.   You already have at least one competitor with a customer base.   Continue reading »

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Agile Development Improves ROI – But RFP Processes are Stuck in Waterfall.

Paul Dittmann, Monday, June 15, 2009 @ 9:17 am

Agile development, when done right, results in better software at a lower cost. More and more companies are coming to this conclusion, but most are struggling with how to adjust their RFP and Governance processes to adapt.

The typical RFP process for custom software development is looking for a fixed bid, thinking this will provide budget protection and guarantee ROI. History clearly shows this is not true. Issuers expect to come within 10-20% of budget. Studies show that custom software costs can range from 50% under budget to 300% over budget. Why?

• Requirements are usually inadequate (though there is a very wide range if inadequacies.)
• The requirements produced generally have little to do with usability.
• Things change – requirements change, technology changes, the competition changes, etc.
• Too many features are built that aren’t used – studies show that 45% of features build under waterfall are never used.

Because all vendors know the above, they all take different approaches to responding to RFPs. Some try to provide a relatively accurate estimate by using historical patterns. This can be fairly accurate if they’re building an application they have done many times before using the same technologies.

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Software Development

Tech Terms that Drive Business People Crazy

Paul Dittmann, Monday, April 6, 2009 @ 5:55 am

Most designers and developers today are familiar with the concept of Personas for describing the users of a system.  In fact, you can use the same concept for how you talk to business people - the consumers of your services.  Put yourself in their shoes, and your services will be better received.

One of the things that drives business people crazy when talking to tech people are the terms they use.  Here are a few to avoid, and what might work instead:

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Software Development