A project management method to help project
sponsors to better manage their software development
Version1 (September 2000)
?Government of Victoria, Australia
1. INTRODUCTION 3
1.1 Intended readers of this document 3
1.2 Additional information on the method 4
1.3 Purpose of the southernSCOPE method 4
1.4 Overview of the southernSCOPE method 5
2. WHEN TO USE THE SOUTHERNSCOPE METHOD 6
2.1 Benefits 6
2.2 Appropriate projects for the method 6 3. ROLES AND RESPONSIBILITIES 9
3.1 Project sponsor 9
3.2 Project managers 9
3.3 Developer 9
3.4 Scope manager 10
4. THE METHOD 11
4.1 Typical contract compared to southernSCOPE method 12
4.2 Project initiation 13
4.3 Software requirements analysis 14
4.4 Change management 14
4.5 Implementation 16
5. GUIDELINES AND GLOSSARY 17
5.1 Project initiation 17
5.2 Software requirements analysis 17
5.3 Change management 17
5.4 Implementation 18
5.5 Glossary of terms 18
APPENDIX A - SAMPLE PROJECT REQUIREMENTS DOCUMENT 20
APPENDIX B - SAMPLE PRESS ADVERTISEMENT 21
APPENDIX C - SAMPLE CONTRACT 22
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The southernSCOPE method is a project management approach designed to give project
sponsors (customers of software projects) the ability to better manage their software acquisition
projects. This method reduces the risk of budget blowouts and helps ensure good value for
money. It results in the customer paying the software developer an agreed price for each ‘unit’
of functionality in the delivered software. The most common technique for measuring units of
functionality is function points, which leads to its more common name of the ‘$ per function
1.1 INTENDED READERS OF THIS DOCUMENT
This document is primarily for project managers within the customer organisation of a software development project. Project managers have the day-to-day responsibility for ensuring that the
project starts effectively, runs smoothly and completes successfully.
This document is also for the project sponsor within the customer organisation. The project
sponsor is the person who has the primary requirement for the software application, and whose
business objectives depend upon the successful completion of the software application. The
project sponsor is typically the person who identified the need, and will provide project funding.
This person is ultimately responsible for ensuring that the software is provided to budget, to
schedule and meeting the identified need. The project manager within the customer organisation
typically reports to the project sponsor.
The document describes how to apply the southernSCOPE method to a software project, and is intended for ready reference during the course of the project. The document assumes a basic understanding of the southernSCOPE method, of software development processes, and
of project management techniques.
A secondary audience is project managers within the software developers. These people need to understand the project management method that a sponsor has elected to follow. This
understanding allows the software developer to fit the southernSCOPE method into the software development process that the development company would normally use.
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1.2 ADDITIONAL INFORMATION ON THE METHOD
There is a range of information available to help people understand the SCUD method and show
them its benefits. This information is for project sponsors, project steering committees, and
project managers within customer organisations, as well as project managers within software
development organisations. Following is a list of the documents available:
? An Information Brochure providing a brief overview of the method and its benefits. It is to
introduce people to the method, and by describing its benefits, encourage them to find out
? Two Case Studies telling of the method’s application to software projects. The case studies
present the story of real software projects that applied to method.
? A Presentation for Project Sponsors. It shows how the southernSCOPE method eliminates
the common causes of budget overrun in software projects.
? A Computer Based Training Package for project managers and sponsors on the method’s
application. This training material is intended to prepare people to use the southernSCOPE
method on their projects and to provide them with the background necessary to use the
These are available from the Victorian Government Intranet (Livewire / IT & T / IT & T Policy)
or from the web site of Multimedia Victoria (www.mmv.vic.gov.au).
1.3 PURPOSE OF THE SOUTHERNSCOPE METHOD
Multimedia Victoria developed the southernSCOPE method to provide project sponsors an
alternative, more effective, approach to acquiring their software applications. Traditionally
software developers have invoiced project sponsors for custom-built software based on either
the inputs expended (by paying an hourly rate for each member of the development team), or
fixed-price agreement made in reference to an existing specification document. The
southernSCOPE method allows project sponsors to treat software acquisition the same way as many other services, that is pay for the service based on an agreed price per delivered unit.
The southernSCOPE method covers all aspects of the payment to software developers for their services. It will guide project sponsors in starting up and managing a software acquisition
project based on $ per function point payment agreement. It integrates effectively with almost
all software project management practices. (Refer below to identify in which circumstances the
SCUD method is inappropriate.) This ensures that if the customer organisation has a specific
methodology for software projects, they can incorporate easily and effectively the
southernSCOPE method into the appropriate parts of their methodology. ?VICTORIAN GOVERNMENT, AUSTRALIA 4 OF 22 SEPTEMBER 2000
1.4 OVERVIEW OF THE SOUTHERNSCOPE METHOD
This overview provides sufficient information to help you understand the major differences
between this method and traditional project management approaches. The essential steps are as
1. The project sponsor identifies that a need exists to acquire application software and prepares
a Project Requirements document to define the project.
2. The project sponsor engages an independent scope manager to perform a preliminary
function point count (PFPC), and from this provide early estimates of cost and duration. 3. The project sponsor invites proposals to satisfy the identified need, with the payment for the
software based upon dollars per function point delivered.
4. The project sponsor selects the best proposal and engages the successful developer. 5. The development commences with a phase of analysis that produces a System
6. The scope manager conducts a function point count on the System Requirements
Specification. With adjustments to balance budget with requirements, this determines the
baseline functionality for the software, and thus the remaining project budget. 7. During the project, the project sponsor makes payment to the developer on the basis of
software, or other measurable products, actually delivered. During this period, the scope
manager helps determine the price impact of changes raised after the Requirements
The key difference between the southernSCOPE method and the older fixed-price approach is
the direct linking of the price to the unit of delivery. Though the emphasis of the method is on
the development of new software, it can also apply to projects that involve major additions of
functionality (enhancements) to existing software.
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2. When to use the southernSCOPE method
This section briefly explains why and when project sponsors should apply the southernSCOPE method to their software projects, and also what sort of projects the method suits. For more
detail of the method’s benefits, refer to the documents listed above.
A review of how the southernSCOPE method had been used within the Victorian Government,
which was conducted in July 2000, identified that projects using the southernSCOPE method
1are likely to receive the following substantial benefits.
? They are highly likely to finish within a controlled budget, which is a budget determined at
the end of the software requirements analysis phase, plus a 10% contingency for changes.
2This is a major benefit, as average budget overrun for software projects is 89%. ? They are much more likely than typical software projects to meet the project sponsor’s
objectives and achieve all important requirements.
? Customers receive ‘cost per delivered unit’ rate which will be within the top 20% of current
industry best for comparable organisations.
? There will likely be less conflict between customer and developer than occurs on typical
Use of the southernSCOPE method on software projects does not cause any problems additional to those that software projects can normally encounter.
2.2 APPROPRIATE PROJECTS FOR THE METHOD
Software products used by government agencies normally fits into one of three categories:
? Personal productivity (software that improves the productivity of individuals in their work
e.g. word processors, spreadsheets, e-mail, drawing).
1 Sage Technology, Report on the SCUD Methodology Review, June 2000 (Contact Terry Wright, 03
9651 9006, email@example.com)
2 The CHAOS Report, The Standish Group, www.standishgroup.com/visitor/chaos ?VICTORIAN GOVERNMENT, AUSTRALIA 6 OF 22 SEPTEMBER 2000
? Information infrastructure (software that supports information management needs
fundamental to all organisations e.g. accounting and financial management, human
resources and payroll, document management).
? Core agency operation (software that supports the core operations of the agency e.g. court
case management, hazardous waste transport certificate management, training organisation
funding application and disbursement).
The southernSCOPE method most suits the acquisition of software for information
infrastructure and core agency operation. It can work with both package customisation and
custom development approaches to the provision of software.
Software projects themselves typically fall into one of five categories:
? Development of a new software product for business needs that did not previously exist, or
were not previously met with software. eg. the creation of software to support electricity
trading when the Victorian government created a wholesale electricity market. ? Redevelopment of an existing software product using new technology, and probably also to
meet new business needs. eg. the creation of a web-based product ordering system to
replace a mainframe-based ordering system.
? Purchase of a software package and subsequent development work to customise it to the
specific business needs of the customer. eg. purchase of an enterprise resource planning
package such as PeopleSoft, SAP or Baan.
? Enhancement of an existing system to meet new and additional business needs through
additional functionality. eg. enhancement of a payroll system to track superannuation
? Adaption of existing functionality to fit it to a changing business environment, without
adding significant new functionality. eg. changing a product ordering system to handle the
introduction of GST.
The southernSCOPE method works well for the first four of the five categories of software
Taking an alternative perspective, the southernSCOPE method works well on software projects
with the following characteristics:
? There exists a well-accepted technique for measuring the functionality of the delivered
software. At present IFPUG function points have the highest level of acceptance across the
Australian software industry; however, IFPUG function points do not measure with
acceptable accuracy the functionality of all types of software.
? The project is able to limit the number of changes to functionality occurring between
completion of the requirements specification and delivery of fully functional software. Note ?VICTORIAN GOVERNMENT, AUSTRALIA 7 OF 22 SEPTEMBER 2000
that all software project management methodologies have difficulty keeping within fixed
budgets when there are high numbers of changes during software construction. ? Completing the project within a controlled budget is of primary importance. ? The requirements of the project can be documented with sufficient precision for functional
All information infrastructure support software has these characteristics, and most software for core agency operations also has them.
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3. Roles and responsibilities
Personnel fulfilling several roles perform the southernSCOPE method.
3.1 PROJECT SPONSOR
The project sponsor is the software project’s key person within the customer organisation. The project sponsor identifies the need for the software, and drives the initiation of the software project. The sponsor must ensure that appropriate personnel are available to decide, communicate and approve the functionality required. The sponsor also needs to decide other requirements such as project constraints and budget. During the course of the project, the project sponsor must be available for discussion and resolution of any changes raised on the requirements.
3.2 PROJECT MANAGERS
For a government software development project, there are typically two project managers: one within the customer organisation reporting to the project sponsor, and one within the developer organisation. Project managers have the day-to-day responsibility for ensuring that the project starts effectively, runs smoothly and completes successfully. Customer project managers and project sponsors typically use the southernSCOPE method.
Project managers within the development company need to understand the project management method that the project sponsor has elected to follow. This understanding allows the software developer to fit the southernSCOPE method into the software development process that the
development company would normally use.
The development organisation is responsible for producing the System Requirements Specification and providing the software solution that meets this specification. They must have agreed to do so based on a price per unit of functionality delivered. The software solution delivered may comprise pre-existing software, software developed specifically for the project, or a mixture.
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3.4 SCOPE MANAGER
This is an independent person with expertise in functional size measurement (function point
analysis) who also has experience in software project management. The scope manager
conducts the preliminary function point count (PFPC) performed during project initiation, and
then the baseline function point count (BFPC) of the requirements specification that sets the
precise project budget. Throughout the project, the scope manager monitors any significant
changes raised, evaluating their impact against the BFPC and advising each party of the
implications of the changes.
The success of a southernSCOPE project for both parties depends upon the independence of
the scope manager. Though the project sponsor typically pays the scope manager’s fees, it is
important that the scope manager act independently to protect the interests of both project
sponsor and developer.
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