comment about good thing about the anwer of this discussion

comment about good thing about the anwer of this discussion and try to improve the answer of this discussion in short sentence (the comment and improvement should be around 5 to 8 line)

The discussion is about this:

Assume you are a project manager at a software engineering consulting firm. One of your key responsibilities is planning and estimating software engineering projects. A client organization has sent you a set of high-level features that it needs for a new software product. You must prepare a proposal that contains your approach, cost, and schedule. The client requires that you submit a fixed-price (schedule and cost) bid. Describe how you would prepare such a bid and how you would deal with the risks presented by the fixed-price requirement. Don\'t actually produce a proposal, but focus on discussing how you would deal with the risks.

The answer to this scenario involves some basic assumptions, as the type of software being developed and the organizational structure determines the best approach. My assumptions are that the product involves a medium sized team of 4-6 people from different functional areas: back-end, front-end, UX, Testing/Compliance. The organization is a strong matrix and the fixed price contract will be negotiated between the business development account manager and the client. My role as the project manager in this estimate is for internal control and technical feasibility. Business development has given a target range for the size of the contract based on market driven analysis and historical work by the firm or even a target set by the client.

The most critical aspect of this scenario is that the contract is fixed price (including schedule). This magnifies the risks, as the consequences are more critical. The only leeway in managing unforseen circumstances is to narrow the scope, or loose money on the contract. It is imperative that system requirements are flushed out in detail and are part of the contract. The customer must agree that changing requirements will have adverse affects on the cost and schedule. This should be feasible with enough planning but requires some investment on behalf of the client and the vendor. These aspects are more on the contracting side of things.

As for the estimate, I would start with my own historical reference given a similar type of project performed by my team, if available. Ideally, there would be enough time to perform an Activity Based Estimate. This should be feasible if there are enough requirements given, or both parties agree to a substantial requirements analysis. A nominal work break down structure (WBS) would be drafted with a Senior Architect. Functional leads would be consulted for estimating parts of the WBS relevant to their expertise to flush out details. Including functional leads in the estimate provides two critical functions: 1. It improves the accuracy of estimates and risk indentification, and 2. helps build repoire as it is easier to hold people accountable if they are helping to determine the benchmarks (team members feel like they have ownership of the solution).

From the WBS, I as the project manager can build a schedule and estimate the total cost. Then, the same architect and funtional leads can build a Risk Breakdown Structure with a mitigation plan. This includes estimates for fixing things that go wrong in the identified risks. Probability that the risk occurs is assigned based on the amount of information available from the requirements. These estimates are totaled and then weighted from the probability they will occur. This total becomes the project reserve which is added to the estimate. I would propose transparency with the client, identifying that the reserve is part of the estimate and that if it is not used it can be applied for additional services. I should note, that in my assumptions, the fixed price contract would be negotiated. As the PM I would submit conservative estimate with justification to be used as leverage. I would expect pushback from the account manager to fit a preconceived target, and pushback from the customer which would bring the estimate down to the final price.

Good thing about the answer of this discussion:

1. Involving functional leads and using historical project to estimate costs.

2. Risk management.

Improving the answer of the discussion:

1. Change requests are to be addressed after implementing the project at an additional cost.

2. Client organization must assign its members for testing.

3. Train the trainer approach. From client side a manager will be trained and he/she will do the training/support for the client.

4. Have the milestones e.g.sign-off requirements.