Money is the universal language. Or is it sex? I always mix 'em up… Sex on a project can get you in jail, so I stick for the moment with 'money'. Everybody can relate to an amount of dollars. Function points, lines of code (LOC) or mean error deviations on mantissa buffer overflows (MEDOMBO, yep, made this one up) may mean nothing to people; but money talks!

This is probably why stakeholders around a project put such a big emphasis on this subject. It is finally a language they can understand. The great thing is, most items can be expressed in money. So, money is truly the universal language.

During the actual running of the project, the project manager should watch that not more money is spent, then is given to the project, and he should create nice graphs to see how the projects' balance sheet looks like. Duh! Perhaps, we will spend some time on this subject later, perhaps not.

At this moment, when the project is not actually started yet, or hardly, we can consider the schizophrenic situation where money talks heavily, and the thing to construct is not specified (this will be done during requirements determination). This is more a conversation between a dad and his son, where the son is going to buy a car…

Son: "It must cost at least $ 50.000,-."

Father: "You must have a car in the range of $25 till 30 thousand."

(I have no idea what a car costs in the US)

Neither of them said something of a little red Corvette or a little Purple Pinto. But they express their stakes directly into a metric, which they can compare. Dad has been ripped off before by his daughter with her car, and promised his wife that he wouldn't make the same mistake again, but he wants to pay some. Son just wants to cruise for babes, and assumes daddy is picking up the tab. So, if you were a negotiator on this one, forget the absolute amounts, and focus and learn from the stakes.

If, for example, a system has to be built for a customer, where the specification for it is 4 lines, and the customer wants it for not more then $ 10.000,-, the origin of this '10.000′ would be the most valuable information a software project manager could get from this statement.

• The previous project that the financial controller handled, was originally estimated for $10.000 and went way over budget.


• There is a procedure which allows a certain level of management to make investments until $9.999, and for higher amounts one has to be a level up in the hierarchy.


• Five years ago the company asked for a quote on a completely different kind of system which was $20.000 and the brother of the nephew of the vice president said that this system was half the complexity of the other one.

By knowing the reasons you can deal with the amount. E.g. in the first case you can talk about a good way of tracing and tracking of the budget with the controller to avoid an unexpected overrun. Be creative.

A great source of information is the way a deal is either constructed, or how the customer (can also be an internal customer) wants the costs to be constructed: fixed price or time-and-material (T&M) based. In the first case, an exact amount is determined to deliver a certain good or service. In the second, the cost depends on the time and material actually spent, and will therefore be calculated after the job is done.

With fixed price, you really have to be sure you exactly know what you want as a good or service. Otherwise, you know exactly in advance what you have to pay for a system you don't need. With time-and-material you must be able to manage the project in such a way, that it really ends and doesn't drag on for years and years. If you view statements about the construction of the cost in this light, you get more and more insight in the truth (it really is out there, you know).

To summarize, in relation to the 'money' aspect, you have to answer the following questions:

• Which financial statements are already made in respect to the project?


• Who made these statements?


• Why did they make these statements (stakes)?


• Are there already statements on cost structure (fixed price vs. T&M)?


• If yes, why are these statements made (stakes)?


• How can you satisfy these stakes in such a way that there will be some room created to change absolute amounts?

Note on the last question: creating some room does not mean that you are actually going to change the amounts. The goal is to provide yourself with enough room to operate.