Home > > Home

ForumsHome

This Question is Answered

1 "correct" answer available (5 pts)
Post a new topic
14 Replies Last post: Oct 3, 2008 4:32 PM by DomainDiva

The Cost of Scope Creep

Sep 16, 2008 11:46 AM

Click to view DomainDiva's profile Mogul DomainDiva 1,731 posts since
Oct 10, 2007
Forum Tech pros please help....I need some hourly numbers for:

code writing

web design

project management of the aforemetioned two skills

We have had some serious scope creep in the past three months and I need to prepare a financial report to our investor. **Note** we are not asking for more money.

Our application is on track and we will soon be starting beta testing.

Thanks, Diva
Report as inappropriate
Click to view caffeinated's profile Mogul caffeinated 175 posts since
Apr 29, 2008
1. Re: The Cost of Scope Creep Sep 16, 2008 11:57 AM
Hi DomainDiva,

What's "Scope Creep?"
Click to view Lighthouse24's profile Mogul Lighthouse24 2,396 posts since
Oct 10, 2007
2. Re: The Cost of Scope Creep Sep 16, 2008 12:20 PM
I have nothing useful re web design, but have project management experience/records for application development, customization, and integration of ERP/ERM systems. What kinds of numbers are you seeking for code writing and project management?
Click to view Bluesuit's profile Mogul Bluesuit 136 posts since
Oct 23, 2007
3. Re: The Cost of Scope Creep Sep 16, 2008 12:48 PM

Scope creep - I'm familar with that! The first thing that comes to mind is the deviation of expected vs. actual hours caused by new or changing requirements. I am guessing that your investor will support you on the scope creep if it was instrumental, and esp. if it is not costing them more $$. By the way, why have you decided to absorb the costs vs. transfer the cost or do a split?
Click to view DomainDiva's profile Mogul DomainDiva 1,731 posts since
Oct 10, 2007
4. Re: The Cost of Scope Creep Sep 16, 2008 1:43 PM
in response to: Bluesuit
Bluesuit you have got the idea down pat. I need some actual cost numbers. The people that are working with me decided not to increase the dollar amount to complete the work. What we are doing is pretty 'new' as far as methodology goes and all the team members want to see it through. Their bid was the number I used for the second round funding request from our investor. The investors money is only being used for product development, I am funding personally all of the other costs such as travel, web hosting etc.

I want to compensate these people with stock/options fairly and I need to present some good numbers to the board to get the shares/share options authorized.

The presentation to the investor is to show him why the product is not yet launched, (no he is not screaming) and how the application has developed into its' current form...which is totally different from what I envisioned and initially designed...much simpler and visually managed instead of having to use an interface or search engines...

I am absorbing the costs because all this was my idea and the people on my team are important to me..I have to take care of them and the company ...its my responsibility!
Click to view DomainDiva's profile Mogul DomainDiva 1,731 posts since
Oct 10, 2007
5. Re: The Cost of Scope Creep Sep 16, 2008 2:01 PM
in response to: Lighthouse24
Thanks Lighthouse, I would like to get some kind of an idea of how much a project manager would charge for overseeing a project that had gone into 'scope creep time of about one year' past the initial bid. A flat number is OK.

Thanks Diva
Click to view Lighthouse24's profile Mogul Lighthouse24 2,396 posts since
Oct 10, 2007
6. Re: The Cost of Scope Creep Sep 16, 2008 6:47 PM

This may just be semantics, but to me "scope creep" means that someone has added requirements (new products, features, or deliverables) to the project without changing the budget or schedule. Your description makes it sound like you were aware of the changes and knowingly slipped the schedule -- and are now trying to compensate developers in some way for the extra time worked.

Whatever the case, on large scale software development or customization projects, my M&O costs have typically run around 20 percent of the total labor cost that's spent for analysis, coding, testing, and deployment -- with about half of that 20 percent being billable as project manager and/or team leader time. So that's one way to look at it.

For "bleeding edge" projects or in cases where we knew going in that the scope was poorly defined (for example, developing/implementing a system that was required to restart a mothballed facility or a plant shut down for regulatory violations) I've sometimes managed the project for direct costs, plus up to a 5 percent award or performance based incentive. So figuring something like that on the basis of your projected ROI for the additional work might be another approach.

If I've totally misunderstood what you're trying to do, I apologize.
Click to view DomainDiva's profile Mogul DomainDiva 1,731 posts since
Oct 10, 2007
7. Re: The Cost of Scope Creep Sep 17, 2008 9:07 AM
in response to: Lighthouse24
Actually the 'scope creep' came about as a result of the application becoming much simpler to manage which meant more code on the backside. (the simpler the user interface..the more complicated the code). The entire group..meaning "all of us" as a team are responsible in one way or another.

The visual designer did some concept visuals and the code guys realized that if we made a few changes the user 'interface' could go away and users could input their data directly into the application and then link from line items. We have also helped to develop a custom security system with another start up and are in the process of a second upgrade prior to beta testing.

No one saw any of this coming as of last October. The Domain Narrative was straightforward...the system just de-kluged (de-evolved) into simple and basic. So simple that once we started putting the domain narrative into flash we realized it was obsolete...like the third screen....

The CTO says we saved ourselves a boatload of money by letting the application follow the design..that the first product is what we would have had to upgrade to in 18 months to 2 years.

One member would say what if...another one would say cool...I would say wow another one would say lets do it....theres the story. Everone believes in the application so much that they are willing to stay on to product launch and support.

These members have stated that no additional compensation is necessary..I however hold a different opinion. Everyone on the team is either family or long time business associates, or associates and friends that that jumped in when they saw the product concept two years ago.

I guess the best way to describe the team would be 'ant colony'. All working towards that goal. We really have all become family.

Every team member knows that I will lay on the railroad tracks for each and every one of them.
Click to view Lighthouse24's profile Mogul Lighthouse24 2,396 posts since
Oct 10, 2007
8. Re: The Cost of Scope Creep Sep 17, 2008 11:57 AM
Diva, that sounds like agile development -- so if it's any help, a scrum master in your area would earn $80-150K depending on experience and the number of developers and technologies involved.
Click to view caffeinated's profile Mogul caffeinated 175 posts since
Apr 29, 2008
9. Re: The Cost of Scope Creep Sep 17, 2008 1:46 PM
in response to: DomainDiva
Ah beyond my capabilities but interesting to see what other small business owners in other industries have to content with
Click to view DomainDiva's profile Mogul DomainDiva 1,731 posts since
Oct 10, 2007
10. Re: The Cost of Scope Creep Sep 17, 2008 1:57 PM
in response to: Lighthouse24
Thanks Lighthouse, those numbers are in the ballpark. Do I have a fabulous group or what????
Click to view crossfoot8's profile Professional crossfoot8 8 posts since
Sep 1, 2008
11. Re: The Cost of Scope Creep Sep 17, 2008 11:02 PM
scope is a word used in audit engagement letters too

Scope of the project or scope of the business focus?

Need to get ground school finished and then take to the sky

and yet, have limo business that needs a shot in the arm too.

Crossfoot8
815-444-6724
Rich
Click to view RickFelten's profile Mogul RickFelten 24 posts since
Oct 30, 2007
12. Re: The Cost of Scope Creep Oct 2, 2008 1:52 PM
Diva, you should be able to get the help you need at about $125 per hour. PM might bill out at $150 or slightly higher.

If the project was properly scoped, you shouldn't have experienced any scope creep. Often, contractors/consultants will bid low with a limited scope and then "surprise" you with critical aspects that were not in the SOW. Very unethical.

If you need any help (we don't do IT work) in sorting this out I'd be glad to assist.
Click to view xenopod's profile Mogul xenopod 109 posts since
Dec 28, 2007
13. Re: The Cost of Scope Creep Oct 2, 2008 3:17 PM
These aren't consultants they are apart of your internal team correct?
Click to view DomainDiva's profile Mogul DomainDiva 1,731 posts since
Oct 10, 2007
14. Re: The Cost of Scope Creep Oct 3, 2008 4:32 PM
in response to: RickFelten
Evidently you did not read my response to Lighthouse. The creep in the scope was explained there. There is nothing to be 'sorted out'. We are on track for beta test and then launch.