Law for Small Business For Dummies--UK by Clive Rich

Author:Clive Rich
Language: eng
Format: epub
ISBN: 9781118970454
Publisher: Wiley
Published: 2016-01-18T00:00:00+00:00

Agreeing the cost of the software

To commission ‘the cuckoo’s chin’ of software development, you need to keep cost control and (in particular) cash flow uppermost in your mind.

More rights equal higher costs; if you want to own your software outright, taking an assignment from the developer, this approach is likely to cost you more than if the software developer retains title and you just take a licence off him. Your ownership is a better outcome in terms of giving you control over your software, but it comes at a price.

For this reason, you need to budget for your spend; software development meanders like a river and the costs can turn into raging rapids as the process twists and turns. Set a budget at the outset so that you have an anchor against which to measure your financial progress as the project develops. The following points help you to cap your software spend and the rate at which it flows out the door:

Set development milestones: Set milestones and break the payment of costs down so that they’re linked to the achievement of each milestone. Doing so puts you in a safer place than paying upfront or paying in timed stages (regardless of actual progress) or (worse still) paying an hourly rate for development. The latter leaves you horribly exposed and incentivises the developer to take more time.

Setting milestones and timescales for achieving them allows you to include delay deductions from the overall price if a milestone date is delayed.

Setting milestones is harder when you’re using an agile form of software development rather than a more traditional waterfall process because, by definition, the scope keeps changing (refer to the earlier section ‘Staying nimble: Advantages of agile programming’). However, you can still set a cap at the outset on the overall budget for which you expect the entire project to be delivered, and hold back as much as possible until final delivery. In this way, you don’t provide an incentive for the developer to spend infinite amounts of time adapting and refining multiple elements of the software.

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