DO YOU HAVE A PROJECT THAT INVOLVES
CUSTOM PROGRAMMING?
If so, please read the following.
When embarking on a medium to large "custom programming" project (i.e. over a day of work) it is often not clear from the beginning how the scope of the project may evolve. This is because customers (the ones with the ideas) are not able to look at and "feel" the work since it has not even commenced yet. The end result of the development is therefore largely conceptual, perhaps based on initial specifications and mock-ups. The customer often then needs to backtrack (and spend more money) to implement things that may not have been foreseen at the beginning of the development. In order to address these issues Beyond Solutions operates using the "Progression Method" when doing custom programming. Following is a description of the two methods typically used when proceeding with a project that involves customizing software.
1. Judgement Method
Under this method judgements are made about the time it will take to complete a project based on an up-front set of specifications provided by the customer. A quotation is given based on the requirements understood at that time. The total number of hours quoted and the hourly rate is significantly higher when this method is used since there is a need to factor in the "unknown", i.e. things that may only come to light after development has commenced. If the development takes unforeseen turns it may be necessary for the programming house to re-quote the job, thus resulting in even higher costs for the customer and an extended timeline for the project. Since the programmer is constrained by the quotation there isn't the opportunity to make improvements during the development "on the fly" as would be the case when the Progression Method is used. This can degrade the quality of the entire project. Up-front payment is usually 50%-70% of the entire estimated project cost. Under the Judgement Method the customer is not given access to the source code until the entire project has been paid for in full.
2. Progression Method
Beyond Solutions uses the project Progression Method. Under this method project specifications are reviewed and a "ball-park" quotation is given so the customer has a good idea of what the development costs will be. A timeline is set at the beginning to direct the programmer during development. The development proceeds with a weekly or biweekly retainer (depending on project size) based on an hourly rate significantly lower than would be the case if the Judgement Method were used. This type of development method is basically a pay-as-you-go system under which the customer pays only for the work done and is free to stop the work at any time without paying additional monies. Periodic progress reports are provided and recommendations for improvements may be made by the programmer as the work progresses. Care is always taken to do as much work as possible in the least amount of time. Up-front payment usually consists of a small retainer to cover programming time. Under this method the customer may have access to the code at any point during the development.
FAQ
Q. Will I end up paying more with the project Progression Method?
A. No. In fact you will almost certainly be paying less. This is because when the Judgement Method is used the hours are "padded" in order to make up for any unanticipated shortfalls. Companies that use this method will never give you a refund when work time is not utilized, instead they will just take a larger profit. With the Progression Method you always know exactly where you stand. If a portion of your retainer is not used you will get a refund. Combine that with a lower hourly rate and you can save 30%-40% off what you would pay if the Judgement Method were used.
Q. I want to know the exact amount I will spend and the time it will take before I start a project. Is this possible?
A. Actually it is not possible with either method to "nail things down" exactly (although you can get close). This is because software programming is not an exact science that lends itself to quantitative measurements. Instead it is a creative endeavor where requirements are implemented using the most efficient methodology possible. Companies that offer programming services try to address this by raising rates and "padding" quotes. Although the Judgement Method purports to give an exact up-front figure, this is misleading since you are paying more than you need to and you can be hit with additional changes at the end of the development. This can then devolve into a dispute between the provider and the client with the provider wanting more money to finish the job and the client wanting the job completed at the initial price. These cases often wind up in court. These pitfalls are avoided when the Progression Method is used.
Q. Which method is generally more favorable to me as a customer?
A. Without a doubt the Progression Method gives the customer more advantages. Most companies favor the Judgement Method as it is more profitable due to the "padding" of hours and the higher hourly rate. Some companies actually lower the hourly rate and just pad in more hours to make up the difference. This is the "little secret" that programming houses don't want you to know. The Progression Method is far more ethical and ensures you pay only for time actually spent.
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