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Outsourcing DSDM Projects White Paper

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  Outsourcing DSDM Projects White Paper
SKU: wp04
£14,95 GBP
($24,00 / € 18,87)
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Outsourcing DSDM Projects White paper

This White Paper will be sent as an email attachment within 48 hours of cleared Payment.


Category: DSDM White Papers

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White Paper Synopsis:

There are many reasons why an organisation may need to outsource a development project and many types of contracts that have been used to control the relationship between such a customer and their supplier.

The White Paper considers the nine DSDM principles in the context of various types of contract (particularly Fixed Price and Time Hire) and it is apparent that a typical Fixed Price contract, as used for many developments involving the classic waterfall life-cycle, can be inappropriate for DSDM. This is particularly true if the contract requires that a detailed requirements specification must be agreed before design and development work can proceed.

A Time Hire contract clearly provides more flexibility than a Fixed Price one and is therefore better suited to an iterative development lifecycle, where effort cannot be reliably estimated at the start of the contract. Many customers will not however welcome the idea of a Time Hire contract where the customer still has to control and manage all aspects of the project, and where the contract may appear to be a bottomless pit.
Consequently a Managed Time Hire contract may be more attractive, with the supplier taking on responsibility for management activities such as planning, reporting, quality, etc. This type of contract is particularly well suited to a DSDM project because it retains the flexibility needed by the supplier while off-loading a lot of the management responsibilities from the customer. Any customer concerns about the potential for a Time Hire contract to be never-ending (and never-delivering) are alleviated by the visibility provided by the frequent deliveries required by DSDM.
The White Paper also identifies another type of contractual relationship that is well-suited to DSDM, that of a Framework contract. In common with Time Hire contracts, a Framework one does not necessarily require a detailed requirements specification and it allows for the call-off of resources as and when needed. The existence of a framework contract also tends to demonstrate that there is an established and trusting relationship between the two organisations; such a relationship is required for the success of any co-operative development.

In its summary, the White Paper states that:

Managed Time Hire or Framework contracts are the most appropriate types of contract for DSDM outsourcing;
Detailed requirements specifications are to be avoided for a number of reasons;

User involvement should be specified contractually (particularly in a Fixed Price contract).

Note: There are several contractual relationships that have been found to work effectively when using DSDM.

These include:

Agreeing a budgetary estimate of the total project costs and, before the start of each phase or timebox, agreeing a fixed price for that activity and then reporting actuals on a regular basis. Actuals can be monitored against estimates to give early warning of overspend. The purchaser can call a halt at any time and, due to having frequent deliverables, has at least got something for the money spent.

Fixing at the start of the project, the number and duration of iterations. This may compromise some of the principles of DSDM, but may allow a fixed price to be agreed while still allowing iteration and frequent deliverables.

Agreeing an Incentive Fee contract, where a "most likely" price is agreed for the development. Any under spend on that price is shared in some proportion between the two parties, while any overspend is paid by the purchaser at a reduced daily fee rate. This serves to deter the purchaser from needlessly increasing the requirements while allowing for some flexibility during development.

Performing all early work on a time and materials basis up to an agreed point in the Functional Model Iteration. At that point a fixed price is agreed (quickly) for the remainder of the work, since both vendor and purchaser will understand more clearly the nature and scope of the remaining work to be done.

Taking the first increment through to delivery on a time and materials basis. Further increments may then be delivered on a fixed price basis. Again, this is possible due to a better common understanding of the scope of work to be carried out.

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