Do you engage with software vendors to do your development? If so, then you know the drill. You provide your vendors with detailed requirements and they come back with a price for the project. But how do you really know whether you’re paying a fair price, and what’s your basis for negotiation?
If you could quantify the unit value created by the project, and know the fair market rate for those units, then you would know what you should pay for the project. You would be in a strong position to negotiate a fair price with your vendor.
Function Point Analysis can provide that information. It is a technique for measuring the functionality that is meaningful to a user, independent of technology. Function Point Analysis is governed by IFPUG, which produces the Function Point Counting Practices Manual. This manual is used by all IFPUG-certified Function Point Analysts to conduct function point counts. IFPUG is an ISO standard for software measurement.
Industry standard rates for the development of function points are available. Armed with the function point count for the project, along with the market rate, you’re ready for a win-win negotiation with your vendor.
Looking for more information? Check out these publications:
- An introduction to Function Point Analysis, including what it is and who would benefit from it. Download.
- DCG’s Function Point Analysis services. Download.
- DCG’s Software Vendor Savings offering. Learn more.
If you need more information on how to use Function Point Analysis for evaluation and negotiation of vendor pricing, or if you have general questions about function points, don’t hesitate to reach out! I’m always up for a discussion!
Anthony Manno, III
Vice President, Outsourced Services