Putting together a statement of works and quote to build

**doodab** · 20 December 2011, 14:34

There does seem to be a lot of money sloshing around recently. I think it's the effects of inflation starting to change peoples perception of value.

**bobspud** · 20 December 2011, 16:42

Originally posted by MarillionFan View Post

Was asked to review an SOW and the underlying project plan/costs for a new bolt on to their existing CMMS system, and so to compare to a buy/license option.

A detailed project plan was implemented. Going to each minute detail. A preliminary model designed, the resources, time involved, different costs etc and the build cost of £450k was mooted, which was high. Everyone agreed.

I then reviewed and pointed out some fundemental issues with it and that some assumptions were wrong. Reworked the whole thing over the last two weeks with the team and when completed I put in the new quote/proposals of £280k which included very generous resource plans plus a 10% contingency.

Just done the review with the stakeholders and it finished with them going. Seems a but low they said, lets call it £500k just to be sure!!! And they all agreed.

FFS!

What is the point?

Because you are confusing the technical answer with the political one.

For instance:

Building a server if left to a techie comes down to 3 days max but when you then allow for raising purchase orders, delivery to the DC, having DC access granted for your engineer, documenting the solution, signing off the installation, installing the software and so on. that three days blows up in a big way.... For instance EDS used to have an SLA with one of my previous customers that ran into a month of work to install a single 1U server....

There is also the valid point that your budget holder would like to come back to the Finance Director and say: "Hi we are all done and under budget by £2-300K" Not "Oh crap! Please can I have another 300K to finish that 200K job please?"

So asking for 500K to perform a 200K job is a very career aware way to do it

**original PM** · 20 December 2011, 18:10

Interesting

If you use Agile you get 50% contingency in Feasibility and then by the time you get to foundation you should be down to 10% due to work done during these phases to refine the solution...

However why is people look at a project and the first thing they do is ask about cost...

better bet is to look at what you want the outcome of the project to be, look at what the expected benefits are (not just cash but 'soft' ones too) and then decide how much you are willing to pay for it...

Makes things some much easier

**MarillionFan** · 20 December 2011, 18:31

Originally posted by original PM View Post

Interesting

If you use Agile you get 50% contingency in Feasibility and then by the time you get to foundation you should be down to 10% due to work done during these phases to refine the solution...

However why is people look at a project and the first thing they do is ask about cost...

better bet is to look at what you want the outcome of the project to be, look at what the expected benefits are (not just cash but 'soft' ones too) and then decide how much you are willing to pay for it...

Makes things some much easier

I was then asked later if they could review the solution in detail. My head went in my hands.

**Old Greg** · 20 December 2011, 18:36

Sounds like you missed out on 200k of benefit-orientated design, engagement and business change consultancy.

**MarillionFan** · 20 December 2011, 18:40

Originally posted by Old Greg View Post

Sounds like you missed out on 200k of benefit-orientated design, engagement and business change consultancy.

Actually. I've estimated that it would take me 3/4 months on my own to develop. But of course this is a Corporate and so 'point solutions' are not in scope.

Hence a much larger cost! If it comes off though, thats me sorted for another 18 months.

**AtW** · 20 December 2011, 18:52

Originally posted by MarillionFan View Post

Seems a but low they said, lets call it £500k just to be sure!!! And they all agreed.

They've factored in legal and health costs of dealing with you punching people in the face who disagree with you.

**MarillionFan** · 20 December 2011, 19:04

Originally posted by AtW View Post

They've factored in legal and health costs of dealing with you punching people in the face who disagree with you.

They've mitigated the risk by getting everyone to shave off any stupid moustaches.

Putting together a statement of works and quote to build