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Fixed-Budget, Fixed-Scope, High-Quality Custom Software

Atomic creates custom software for our clients. Our work ranges from greenfield web application development to creating backend data-centric applications. In most projects, we work with multiple technologies and we integrate with other systems. We’re not experts in every technology, but we’re experts at becoming experts with any technology we work with.

Every software project has risks. Some of the risks include:

  • Technology Risk: Does the development team have the ability to create the product?
  • Market Risk: Is there a good product/market fit?
  • Management Risk: Will resources be managed properly?
  • Funding Risk: Will there be enough money to build adequate value for the intended market?

Clients approach Atomic because they do not have the capacity or expertise to independently create a software product. Clients are nearly eliminating their technology risk by working with Atomic.

Some clients want us to reduce risks in other categories. It’s not uncommon for clients (usually in RFPs) to ask for fixed price bids and milestone delivery dates for undesigned software with vaguely defined requirements.

Fixed bid, fixed scope requests for custom software shift the funding risk to the software development vendor. Fixed bid, fixed scope requests lightly imply a shift of management risk too.

Asking your vendor to “insure” your cost destroys transparency since the vendor needs to win some and lose some (like an insurance company). That’s a bad way to build the best possible software.

Atomic does not engage in fixed bid, fixed scope custom software projects because we are not in the business of selling insurance. It would be extremely hard, if not impossible, to become experts in calculating financial and scope risk for such a diverse set of projects. Our risk pool isn’t even big enough to affordably offer such insurance.

Even though we don’t assume complete responsibility for financial and management risks, we do everything we can to reduce the risks for our clients. After all, we are only successful if our clients are successful.

We prefer to work in a fixed-budget, scope controlled fashion. Atomic is great at hitting a project budget and timeline. Our iterative design and build process is held together with project management practices that transparently predict delivery cost and time. When budget and time are fixed, we vary breadth and depth of scope to hit our target. We work collaboratively with our clients to build the best product possible for the given budget.

Released products are always variants of an initial vision. Variation inevitably occurs during the development process when clients, test-users and the product team begin to use the actual product. Our process allows for fluid scope changes while subordinating the team to budget and time constraints.

Risk of undercapitalization still resides with our clients as they have ultimate control over what they want to spend to make the product successful. We do suggest securing funding for 150% of the initial estimate so the project plan can remain slightly flexible.

The relationship with our clients is transparent so clients control when the project is done. The flexibility and transparency allows for a more engaged and responsive product team.

Instead of asking for fixed price, fixed scope bids, we suggest our clients ask vendors for high-level estimates and then make a decision based on the most qualified, trusted, vendor with the lowest hourly rate.

Shawn Crowley (49 Posts)

Shawn is a Vice President of Atomic Object and works in Atomic’s Grand Rapids office. Shawn is involved Atomic’s pre-project consulting work and helps clients understand how Atomic can develop their next product. Shawn is involved in operational management, growth initiatives, and the maturation of Atomic’s deep integration of design and development practices.

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  1. By Estimation Summary for Agile Projects – Nov 2011 on November 18, 2011 at 7:08 pm

    [...] great example is Atomic Object in Michigan.  Here’s a post on their corporate blog to get you started.  You should also check out their  whole [...]