XP and small, fixed-cost projects

Hi,

While reading several XP books and online articles lately I can't help
but wonder how it all applies to a situation in which your cost must be
fixed?

It seems that as an XP practitioner, you have your four variable, you
acknowledge that they affect each other, but are only willing to play
with time and scope.. How does that stand up to reality in small,
fixed-quote projects?

As far as I see it, in fixed-quote projects, scope is the only variable
left to play with (since time costs money, and if you stretch your
timeline, you actually start losing money). Whats even worse is that XP
tells you in advance your estimates are going to be wrong, so how do
you even put a price on a project?

Maybe I'm missing something? (I'm pretty sure I'm not the first nor the
last to raise these exact issues).

Looking forward to learning more,
Yuval

On 18 May 2005 15:00:12 -0700, juvaly@gmail.com wrote:

>Hi,
>
>While reading several XP books and online articles lately I can't help
>but wonder how it all applies to a situation in which your cost must be
>fixed?
>
>It seems that as an XP practitioner, you have your four variable, you
>acknowledge that they affect each other, but are only willing to play
>with time and scope.. How does that stand up to reality in small,
>fixed-quote projects?
>
>As far as I see it, in fixed-quote projects, scope is the only variable
>left to play with (since time costs money, and if you stretch your
>timeline, you actually start losing money). Whats even worse is that XP
>tells you in advance your estimates are going to be wrong, so how do
>you even put a price on a project?
>
>Maybe I'm missing something? (I'm pretty sure I'm not the first nor the
>last to raise these exact issues).

You certainly aren't the first to raise this issue.

XP (and the other Agile Methods) is a way to measure how much you are
getting done per w, or per month (velocity).  I leave it to you to
decide if this is valuable after having signed a fixed bid contract.

XP can also be valuable as a way to estimate what to bid for a fixed
bid contract.  If you have experience working the XP way you already
have an idea what your velocity is.  You can estimate the project
using that velocity and make your bid.  It is often wise to ask the
client for a few ws to "analyze" the problem before you make a bid.
During that time you can run a few XP iterations and verify your
velocity with a small team.

Of course in order to do a real fixed bid you'll have to fall back on
methods like PERT in order to come up with a ballpark estimate. (see
http://www.objectmentor.com/resourc...es/PertCpmAgile) Then XP
can at least tell you how well you are doing against that estimate.


-----
Robert C. Martin (Uncle Bob)  | email: unclebob@objectmentor.com
Object Mentor Inc.            | blog:  www.butunclebob.com
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but to set a limit to infinite error."
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