Updated October 2021

It is estimated that 75% of all IT projects fail to meet the deadline and end up with unplanned costs.

Gartner survey explains the fact that most projects fail because companies are not accurately estimating the scope of work in the initial stage. In the following sections you are about to learn how you can use the age old 80/20 rule with an ‘interesting twist’ so you can avoid project failures, minimize scope creep, and possibly eliminate cost and time overruns.

Estimate the Scope of Software Development Projects

Estimating the scope of a project in the initial stage is easier said than done. At times, scope estimation without a proper requirement gathering process can really feel like shooting in the dark and hoping you’ll hit the mark.

If you’ve been in the business of Custom Software Development for any length of time – whether as a vendor or as a client, you’ll know that the  initial requirements are usually very preliminary. Generally speaking, if you are looking to build a custom solution, it is either extremely difficult or simply impossible to come up with all the requirements independently without collaboration.

The same way a building architect would have to consult a structure engineer, electrical engineer and the person in charge of plumbing and air conditioning to come up with a comprehensive building plan, a software vendor’s business analyst collaborates with the client and his team members – a solution architect and a project manager to clearly flesh out requirements for the custom software.

A solution architect would look at the requirements from the technology point of view to work out potential stability issues and integrations with third party systems. A business analyst looks at it from a functional standpoint by looking at the client’s specific business problems that need to be addressed. Only a collaborative effort could help capture all of the project complexities, potential pitfalls and hence arrive at the accurate scope of work.

Why Software Development Projects Fail, The Real Problem…

Typically, a custom software vendor has to conduct several interviews, and have several rounds of discussions with stakeholders to clearly understand your business requirements, intended audience, business goals, and dependence on existing systems. This usually involves interviewing you and other key stakeholders of the project so that the scope and value of the project can be accurately estimated. If the custom application has to integrate with your existing software or talk to other third party systems, the complexity and time increases even more.

As you can tell, this involves a lot of work. It is difficult for a software vendor to put in this kind of effort to estimate the project scope and come up with an action plan without the guarantee of a contract.

Likewise, it might be risky for you to sign the contract and award the entire project to a vendor you barely know.

Pareto’s ’80/20′ to the Rescue?

80/20 Rule, popularly known as the ‘Pareto Principle’ was coined by Vilfredo Pareto in the 18th century. Pareto observed that everything in this world followed an interesting distribution pattern.

According to the rule, “Roughly 80% of effects are from 20% of causes”

Strangely, this applies to just about everything in life.

  • In economics, 80% of the wealth is owned by 20% of the population
  • In business, 80% of revenue comes from 20% of customers (or products)
  • 80% of sales comes from the top 20% of the sales team
  • In software, 80% of the real problems are caused by 20% of the bugs

80/20 Rule for Software Development…

Gathering functional requirements and documenting them is popularly known as the Discovery phase or Requirements Gathering Phase. This usually takes about 15 to 20% of the overall project time. Yet, this is the most critical step in the software development process.

As the Gartner Research confirms, most projects fail because the vendor does not do a thorough job in grasping and documenting the requirements. 80% of project complexities and issues can be captured beforehand by an effective discovery phase, which takes up roughly 20% of the project time.

Typically at the end of this Discovery process, you get the following documents, which in itself carry great value, and can serve as a blueprint for building your application:

  • A detailed requirement document
  • A project plan/schedule
  • UI/UX wireframes and design concepts
  • Testing plan and use cases
  • Cost proposal (time and budget)
  • Project timeline

So instead of taking a deep dive and engaging full throttle with a vendor by signing a comprehensive software development contract, you could sign up for only a discovery phase. This is a risk free way to work closely with a vendor to evaluate their approach and capabilities, before engaging in full-blown implementation.

Because the discovery phase involves working closely with senior project management team, by the time this phase ends, you would have developed a significantly better understanding of your vendor’s capabilities and approach, while also getting your requirements nailed down to the finest detail.

Since you will get a detailed project timeline and accurate cost estimate before work starts, you can be certain that you won’t face any unexpected project delays or cost overruns.

’80/20 with a twist’ and an Irresistible Offer…

Perry Marshall in his book ’80/20 sales and marketing’ breaks the 80/20 principle a level further. If fixing 20% of issues solves 80% of potential problems and failures, how about extending the Pareto principle to this 20% of issues? Obviously, even this 20% of issues should be following the 80/20 rule, right? Accordingly, 20% of 20% of the issues lead to 80% of 80% of the problems!

Sounds confusing? Let’s break this down.
20% of 20% is 4%
80% of 80% is 64%

Thus, by addressing 4% of the issues you face with respect to scope estimation, you could avoid 64% of potential problems.

Are You Looking for a Company to Help With Building Software?

Asahi Technologies offers custom software development services for businesses of all sizes and also works with customers looking for custom custom web application development services – whether you are in New York or global.
Here are some of the sofware developement frequently asked questions asked to us by our clients:

Q: I have a fairly decent idea of what I want to build. But, I do not have detailed specifications for my project. Is this alright?
A: Don’t worry if you don’t know all of the technical stuff. We’re happy to discuss your ideas and advise you. We have a highly experienced business team that can comfortably translate business functions and requirements into software project specifications, user stories and wireframes. Most clients that come to us don’t have specifications, we develop these for them. We have satisfied global clients from many different industries – all who were at very different stages of planning. To read some reviews of our Custom Software Development Company & Web Application Development Services check out our testimonials page.

Q: Why should I hire Asahi Technologies for my custom enterprise software development project?
A: At Asahi Technologies, we value the partnerships we create. Our clients represent more than just a project. As your technology partners we’re dedicated to helping you achieve your unique business needs by leveraging complex technologies and providing you the support and maintenance you require after a project is launched. We value creating purposeful and innovative projects that help your business grow, become more profitable and more efficient.

With head office in New York, we have experience working with the most demanding clients, for instance, in the financial industry. We have a strong business development team, which listens to client challenges carefully before crafting the most suitable technology solution and our technology team is passionate about building quality software solutions for clients. We blend the best and the brightest creative thinkers and engineers who are dedicated to excellence and revolutionizing your business with unique web solutions.

Q: Who will be my point of contact at Asahi Technologies?
A: The project manager assigned to your project will usually be your primary point of contact throughout the course of the engagement with Asahi Technologies.

Let Asahi Technologies help you develop your next custom application development project for your business.

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