PPA Global, Ajman
Module: Introduction to Project Management
Topic: Project Report: Cost of Change
Student Name: Mahrukh Shoaib
Instructor Name: Dr. Liju Thomas
Project Report: Cost of Change
Scenario:
You are a software developer provided with a project by a client. After you concluded the project cost,
planning, and designing, you submit it to the client for review. The client confirmed that it’s meeting
their initial requests/expectations but now they want some more additional changes and/or features.
Questions:
•
Should the client be charged for the additional changes? If yes, then how much and why?
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Incase of client refusal to pay extra and risk of losing the project, what’s the alternate plan?
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What if you accept to implement the changes free of cost and you lose money and/or time?
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How shall you calculate the cost of change in this particular scenario?
Task:
Analyze the situation and provide a proper structured response handling all the above changes and
ensuring client’s satisfaction along profit.
Handling Cost of Change in Software Projects
1. Initial Agreement & Scope Definition:
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As a software developer, first I estimated and calculated the entire cost of the project.
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When I got the approval of the client, i began to work on the project.
2. Change Request & Cost Impact:
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Once the analysis was completed, the client reviewed and requested for more features outside
the initial agreement.
•
Since now I am in the coding section, adding new changes will require more time, effort and
maybe new resources.
https://www.projectmanagement.com/articles/308195/an-introduction-to-the-cost-of-change-andtechnical-debt#_=_
3. Should I Charge for the Changes?
Yes, because:
Adding new changes requires extra time, effort and might delay the projected timeline.
New features might involve new recourses, libraries or 3rd party services which all increases costs.
Coding new functions after the design are completed will need to rework and disturb the workflow.
4. How Much Should I Charge?
The cost depends on:
Effort Required – Minor ups and downs may have very less/minimal cost but significant changes will
cost more.
Complexity – Complex changes will require more coding and testing which increases costs.
Type of Contract:
•
•
Contract with a Fixed price: Any change which is beyond the agreed contract should have an
additional cost
Resources Contract: The client will pay for the extra hours worked.
Calculating the cost:
Calculate the extra hours working on the development
Having an hourly rate (for example: 200 AED/hour)
Factor in code testing and its deployment time
Example: If I worked 10 additional hours for the extra changes, the cost would be my hourly rate
AED 200 x 10 = AED 2,000
5. What if I’m at risk for losing the client due to high costs of my additional hours worked?
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I will offer them a discount for minor changes
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Suggest them phased implementation (for example, some features will be added now, some in
the future)
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Inform them the cost of the change and come to a reasonable price via negotiation
6. What if I accept all changes for free and lose money?
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Can lead to unpaid hours of work, reducing the profit.
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If the additional requests are a lot, the contract must be clear that future requests must require
a revision of the contract
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If the request is really high and I have no more budget, I will offer any alternates which I can do
for free or tradeoffs.
Conclusion:
The cost of the change must be carefully decided to make sure the client remains happy and satisfied
and I get the profits of my project. Having this clear change management process from the beginning in
the contract ensures security and prevent any future issues or concern and fair compensation for any
extra or additional work.
The above chart shows the 6 stages of a change life cycle, explained below in my words:
1. Submission: Submitting the client the design, cost, and initial details after getting a proper idea
of their request and if approved, start working on it.
2. Planning: Planning on how the project shall work and its basics.
3. Approval: Sending to the client for approval if it meets their initial requirements.
4. Implementation: Once approved, implementing the details and coding etc.
5. Review: Send to client for review and if successful, close the deal.