Contracts and Pricing

Why do software development contracts get complicated?

Is it because lawyers like to write intricate agreements? Or because developers and their clients enjoy endless negotiations?

Of course not.

It’s because both sides need to manage their risk in a project that has a lot of uncertainty. This includes uncertainty about:

  • requirements and scope
  • complexity of the engineering problems to be solved
  • the productivity and creativity of the development team
  • communication among the team and with the client

Contracts can define the general framework of the project. They can spell out each party’s responsibilities if the truly unexpected happens.

But contracts can’t define a successful business relationship. They can’t dictate trust. Nor can they foresee the myriad of minor problems that arise in a complex software development project.

And let’s face it, how you and the software developer manage all these little risks is what determines a successful project outcome.

Another way to manage risk

Waverley is a small company. We realized a long time ago that it would take more than our engineering expertise and strong contracts to complete successful projects for our customers. So we took another route.

We created a business model and project management practices that are designed to help both our clients and Waverley to manage their risk.

All-inclusive pricing

Software projects are hard enough without introducing complexities in pricing. Waverley’s pricing is based on a rate-per-hour per engineer. This makes it simple at any point in the project to project your price. If you request a change in the project, estimate the hours and recalculate the price. No getting nickled and dimed for lots of extra fees and charges.

Time and materials contracts

Fixed-bid contracts are usually associated with low risk because they force both companies to carefully scope the project. But for complex business software applications, fixed-bid pricing actually introduces risk.

Why? Because you can only fix the price if you can accurately scope the functional specification. And you can only set the scope if:

  • Your customers are clear on their requirements
  • The development team can accurately capture the needs of the customer community

This rarely happens.

By using time-and-materials pricing, you get the flexibility to adapt to changing circumstances. But you don't have to negotiate new pricing each time a change arises. Of course, this only works if you also have disciplined project management.

Disciplined project management

Waverley’s project management methods include several practices that will reduce your risk:

  • At the design and specification phase defining the functional specification as clearly as possible.
  • Forming relationships between the project team and your internal team. By immersing the outsource project team in your company’s way of doing business and forming connections with your staff you increase the chances that individuals will make good decisions throughout the project.
  • Throughout the project establishing clear communication methods between you and the project team. This can include weekly team meetings, a local presence, and periodic face-to-face meetings. These communication channels increase the likelihood that issues will surface early and can be resolved before they get serious.

Multiple paths to minimize risk

A simple pricing structure. The flexibility of time and materials contracts. Disciplined project management. By using multiple ways to manage your risk, a project with Waverley means:

  • Lower overall project costs
  • Lower risk because project milestones and completion dates are predictable
  • Ease of management because the incentives are aligned for you and Waverley.

Call us now at 1-650-322-0230 to speak with a real person and learn more about how we might work together to develop software for you. Prefer to send an ?

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