You need an application delivered fast. And you’re willing to pay more to get it done quickly. But how much more should you pay?
That depends of course on your supplier’s productivity. The more productive they are, the more they can charge on a per-hour basis. That’s because their productivity enables them to deliver the same size application in fewer hours than a less productive supplier would be able to. Which means that the cost to deliver a function point (function point per $) might actually be less than a supplier whose labor rates are much lower! In other words, a supplier with a higher labor cost can actually be more cost efficient – and at the end of the day, this output metric – cost efficiency – is what matters. (Along with application quality, as we'll see a bit later.)
Jun 27, 2011