D365 Project Costing
D365 Project Costing could be treated as a specialist subject in its own right and presents challenges on many different levels. Resources, timeline and budget are the ones most focus on but sequencing, overlaps, testing cycles and much more make D365 project costing a challenge especially if not enough time is given to fully detail what’s involved in a project.
D365 New Implementations
New implementations often referred to ‘greenfield’ sites provide a clean canvas for software implementation companies. Subject to client requirements, planning and cost estimation is a relatively straight forward process for an experienced project or programme management team following well established approaches to determine effort and duration based on what is known..
Existing Dynamics Sites
There are differences between costing a new greenfield D365 project and an existing one, a lot depends on the stage that the project is at. Some could be established live sites wanting to progress onto the next release whilst others could be at any stage between build to deployment.
With existing Dynamics users each has to be reviewed on a case by case basis to discover the status, effort and likely cost, this review has stages and by agreeing terms budgets can be adhered to whilst working towards a realistic effort figure.
This analysis for existing Dynamics users who may want to restart a project, switch MS Partners or upgrade from a previous version is necessary as not everything needs get replaced in this type of project, our pragmatic approach comes from our business experience, there is no point reworking that which evidently works without a good reason.
D365 Sites with Development
For Dynamics sites that have undergone development, the amount and the approach has to be considered by our solution architects, some development might transfer across as straightforward code. As new coding approaches and tools have become available, the approach to coding maybe completely different . It all comes down to analysis, the more we do the more accurate the the cost estimation obviously countering and balancing the cost associated with this work in the first place. Note again AX Software have been doing this longer than most Dynamics consultancies – we are never perfect but pretty good at getting this right and avoiding those nasty surprises younger practices might drop on you.
It Is Your Choice
D365 Implementation project costing is fundamental to an ERP upgrade or replacement project, how the customer wants to proceed with T&C’s is their choice but we always advise make it work for you as a business, tie payments to milestones, leave little ambiguity as to what is expected and tie that up in a contract. At AX Software we are used to working within the software community and can help support you through this process, below we have detailed the approaches to consider.
Fixed Price Based Projects
Where a fixed cost engagement is preferred it enables clients to know what the implementation will cost and essentially transfer the risk of over run to us.
Fixed price may prove to be more expensive than a T&M arrangement, particularly where the project goes smoothly or where the client takes a close interest in the management of resources as basically effort we as the supplier expected to expend is lessened. Incidentally this type of approach generally lends itself to a good project, the more the client takes on ownership the better they understand their new D365 business solution.
We are generally happy to offer a fixed price proposal based on our methodology as follows.
The planning stage stays the same. This will represent between 5% and 10% of the overall project cost and will enable us to prepare a detailed project plan and costing for the project.
Based on this, we will offer a fixed price proposal for the remaining three stages of the project. So, for example, a typical project might involve an initial planning stage of, say £50,000, which would lead to a fixed price proposal in the region of £450,000.
The fixed price proposal will be based on the project plan and will stipulate in detail the work to be carried out by both sides and the timescales for completion of this work. If our work over runs, then we will absorb the extra cost. If the client’s assigned tasks over run, then this may involve extra costs, re-planning with additional costs been added to the fixed price.
We always strongly emphasise the level of detail that needs to be conducted by the client in ensuring that their requirements are fully detailed, inexperience generally leads to poorly defined or loose requirements which reveal additional work in later stages.
It will be these requirements that will form the basis of our scope of work and its in all our interests to have these well understood from the outset and referenceable against D365, its against these that configuration and build are made, its acceptable to miss a few but too many and plans go awry.
Time & Material Based Projects
For some clients, the traditional time and materials contract is the best approach to achieving a reasonable D365 Project costing. Whereas a fixed price contract will require some premium to be added (typically 10% to 15%) to accommodate the extra risk transferred to the supplier, this is not the case with time and materials.
T&M can often suit clients that have specific pieces of work they want their partner to complete for them.
Examples might include:-
Distinct pieces of work such as implementing a feature within a module i.e. Compensation within Human Resources
Reviews of existing business systems i.e. can we do things better such as streamline workflows
Works not associated with D365 such as help with defining business requirements
T&M also tends to suit clients that wish to adopt a blended approach, using their own internal resource alongside our own, cherry picking the areas that their team focus on and calling in our support as and when necessary.