Gartner's Top 10 Technology Trends 2017 suggests the overall direction of travel for all industries including the property market, is one of a world that is becoming an intelligent, digitally enabled mesh of people, things and services.

What then might a smart digitally enabled property market look like in 2025 when we have 5G and Connected Homes where IoT devices, and even the home itself, might have Digital Twins receiving tons of data for analysis by AI enabled software?

Is it likely episodic one-off snapshot reports such as EPCs, Home Buyer Surveys and Building Surveys will begin to be replaced by continuous always-on diagnostic, performance and optimisation services that are part of a home’s online profile on a digital-home-pro Digital Platform?   How will we find and access such services?

Might properties for sale or rent appear as notifications and map-pins on a Google Map on your Smart Phone with GEO tagged AR content available to view on a Google Map or on Smart Phone camera displays perhaps in response to a Conversational Interface voice activated command: 

“Siri, show me properties for sale in a 25-mile radius!”

Title deeds indicating property ownership, the history of ownership and even the transfer of title deeds and exchange of contracts might be mediated through public distributed Blockchain technology.

Such a future presents both a tremendous opportunity as well as a devastating and disruptive threat for businesses working in the property market.

Evaluating when and whether to experiment and invest in such technologies or to wait for further maturation is a matter of keeping an eye on Gartner's Annual Hype Cycles which provide a graphic representation of the maturity and adoption of technologies and applications, and how they are potentially relevant to solving real business problems and exploiting new opportunities.

All The Write Stuff launches the Open House Innovation Lab.

The lab will explore the feasibility and potential of a peer to peer collaboration platform for the UK Property Market and seek to find strategic collaboration partners to help define and develop the property service software and APIs.

“ The UK Property Market is ripe for disruption. ”

Says digital transformation consultant Kevin Hopkins.

“ The UK Government is committed to roll out Smart Meters to all domestic properties by 2020 and this provides the opportunity for Smart Homes connected to the Internet to have persistent online property profiles much like people do on FaceBook and LinkedIn. Placing your property on the market might be as simple as setting your property profile to For Sale and adjusting the privacy settings to public. This will completely disrupt the existing property portals and the current estate agency model. In their place a peer-to-peer collaboration platform will emerge cantered on Smart Homes, persistent property profiles and Blockchain technology. This will give home movers greater control, transparency and trust over the house purchase process together with reasonably priced digital property services accessible 24/7 from their Smart Phones. ”

“ The peer to peer platform will disrupt the current estate agency model on both price and service. The aim of the Innovation Lab is to collaboratively explore these ideas together with the technology and APIs required to create the necessary digital ecosystem to make it all work. This will provide the seamless digital end-to-end services and immediate online transactions supporting the entire customer journey for home movers that the next generation expects. ”

Please register your email address at All The Write Stuff or join our LinkedIn Open House Innovation Lab group to join the discussion, contribute ideas or collaborate with us to help bring this digital vision for the UK property market to life.

A major topic at the World Economic Forum in Davos this year was the Fourth Industrial Revolution, what it means, and how to respond.

I am not convinced by the question mark over the start date in the image above. Personally I feel the Fourth Industrial Revolution started in the early 2000s with the advent of Web2.0, the read/write web or perhaps with the launch of the first iPhone in 2007.

Significant quotes from Davos are:

“A key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures, such as those we see within the “sharing” or “on demand” economy. These technology platforms, rendered easy to use by the smartphone, convene people, assets, and data—thus creating entirely new ways of consuming goods and services in the process. ”

“ On the whole, there are four main effects that the Fourth Industrial Revolution has on business: on customer expectations, on product enhancement, on collaborative innovation, and on organizational forms.”

“ The emergence of global platforms and other new business models, finally, means that talent, culture, and organizational forms will have to be rethought.”

Klaus Schwab, Founder and Executive Chairman, World Economic Forum

A number of well-known Internet companies already convene people, assets, and data thus enabling peer to peer collaboration across the boundary between supply and demand.

• The world's largest taxi company owns no taxis (Uber)
• The largest provider of accommodation owns no real estate (Airbnb)
• The largest phone companies own no telco infrastructure (Skype, WeChat)
• The world's most valuable retailer has no inventory (Alibaba)
• The most popular media company creates no content (FaceBook)
• One of the fastest growing banks have no actual money (SocietyOne)
• The world's largest movie house owns no cinemas (Netflix)
• The largest software vendors don't write the Apps (Apple and Google)

According to research carried by OpenMatters they are all Network Orchestrators in that they provide a platform and set of APIs that facilitate a network of peers in which the participants interact, share and collaborate thus co-creating value for all participants.

Such companies are more profitable, exhibit faster growth, have lower marginal costs and higher market valuations than traditional companies and are much preferred by investors and VCs.

There are opportunities for innovation, digital transformation and network orchestration in the UK property market, particularly the prospect of a peer to peer collaboration platform for home movers as outlined in the following video: -

This article is a must read for any business leader. The digital imperative for digital transformation in all industries couldn’t be clearer. It is time to act.

Register on our website All The Write Stuff to find out more about how we can help you navigate the Fourth Industrial Revolution.

Beyond Gutenberg

“Reading on paper is so much a part of our lives that it is hard to imagine anything could ever replace inky marks on shredded trees.” Bill Gates - 1999

In the article Beyond Gutenberg, Bill Gates predicted the wholesale replacement of pressed wood pulp books by electronic or eBooks. What does digital versus paper media have to do with Smart Homes and Energy Performance Certificates? Read on to find out more ...

Fifteen years on from Gates' prediction, paper retains a comfortable coexistence with eBooks. Nowadays it's not paper-or-pixels but paper-and-pixels. Part of the enduring appeal is the physical experience of paper as well as the lack of device related distractions, but also the fact that you can't easily atomise (break up in to its basic elements or constituent parts) the contents of a book. Be it in pixels or on paper, a story or piece of prose remains a linear experience with a beginning, a middle and an end, all meant to be read from start to finish. However, where information or data can be atomised, then pixels or digital media offer considerable advantages over paper. Let me explain.

Just like a book, a document is a pre-digital information container, an idea that has been around since the invention of the printing press by Johannes Gutenberg in 1440. For a while the use of digital tools such as PCs, word processors and printers, particularly in the 25 years from the mid-1980s to the end of the 20th century, increased rather than reduced the use of paper documents. However, the tide is on the turn.

Atomisation of Data

Paper documents are static immutable snapshots of events in time, one-off commitments of information and data to paper. Released from the confines of their physical containers, information and data are free to be discrete fully digital atomic elements with both richness and reach. Free to flow and group, ungroup and then regroup in real time into new and different forms and collections based on value and meaning to the user (the pull metaphor) rather than audience and purpose determined by the author (the push metaphor). For example just as online music has moved beyond the album and CD as the main units of organisation to individual tracks or user-generated or even suggested playlists, so too information and data are moving beyond the document towards the use of databases and animated data visualisation tools, dashboards and charts for real time status updates, map displays for geographical data and timelines for events. The main technological drivers here are ubiquitous Internet connectivity, massive cloud storage capacity, the emergence of the internet of things, and pervasive use of mobile devices so that information and data are available anytime-any-place-anywhere on desktop or mobile devices in real time and in multifarious and flexible forms thus reducing the need for printed documents.

As it is the time of year for predictions, let’s look at a real world property market example to see how this might play out practically in the coming years.

Energy Performance Certificates

An Energy Performance Certificate (EPC) is required by law when a building is constructed, sold or put up for rent. Currently an accredited domestic energy assessor will carry out the assessment and produce the paper certificate together with recommendations on how performance could be further improved.

Smart Home

In the future there will be no requirement for paper Energy Performance Certificates and this will disrupt energy assessors and websites offering EPCs. A smart home, with a smart boiler, smart windows and smart energy meters connected to a smart energy grid and the Internet would throw off energy performance data in real time for display in a dashboard or timeline. Digital agent software will monitor energy usage and manage appliances to use energy more efficiently as well as make recommendations.

Smart Grid

The website at Smart Energy GB says:

“We have to find ways to reduce our carbon emissions through using smarter appliances which make more efficient use of gas and electricity.”

“The smart grid is a whole new way of running our energy networks. It’s made up of new technologies, equipment, computers, automation and controls, all communicating and working together. It’s a bit like an internet for gas and electricity.”

Collaborative Platform for Home Movers

What’s needed to augment Smart Homes on a Smart Grid, is a collaborative platform for home movers and property professionals which would include a property identity to hold and display such data, a kind of Facebook or LinkedIn for the property market. Such a platform might also contain an online service history for your house just like you have for your car. Such data displayed in a timeline could act as a home condition report and might also contain Home Buyer Survey and Building Survey findings rather than the current document based reports. Such a bold digital business model would go some way to meeting the coming generation’s expectations and appetite for seamless online digital services.

Facing the Digital Imperative

Such disruptive technological changes are certainly achievable and this creates threats for incumbents slow to move and opportunities for those with the digital vision, leadership and agility to pursue them. In another 15 years at the end of 2030, we will look back again to see how much of this has materialised and who were the winners and who the losers. In the meantime make sure you are on the winning side. Contact the author Kevin Hopkins, leave a comment below or sign up to be notified of future posts at the foot of this page and finally make sure to visit the Academy of Digital Business Leaders to find out more about the digital leadership necessary to successfully face the Digital Imperative.

Numerous established and hitherto successful industries have been disrupted by new entrants introducing new and bold digital business models. Many well-known companies are now extinct and more will likely to follow. Defining and pursuing a strategy for digital transformation in your business area before someone else does is a top priority for any Managing Director, Senior Management Team or Board of Directors. It demands management action in eight key areas all of which involve fundamental business transformation, operational and implementation risk and significant disruption, but, failure to act, risks a fate far worse than disruption; extinction. This is the digital imperative.

What does this mean for you and what should you do about it?

Ask the right questions

• “How will digital technologies change how we create value for our customers?”
• “How will digital technologies help save costs?”
• “What is the overall task facing our customers?”
• “How will digital technologies better and more fully fulfil and facilitate this overall task?”
• “What business are we really in?”

Disrupt or be disrupted

Asking these questions provides the opportunity to challenge the status quo and disrupt your own business model before others do it to you. Analogue businesses risk attack from new entrants looking to do things in a different way. It follows that you must do things in a different way yourself. Be your own attacker, launch products and services that attack your current offering.

Collaborate, acquire or build

The normalisation of digital lifestyles is changing consumer expectations of what websites offer and do. Digital natives comfortable with and hungry for digital technology and services seek seamless, integrated open and transparent offerings that appear to come from a single provider. This then is about joining up end-to-end business processes so they appear seamless to end users thus enabling them to complete transactions online rather than just access information or do only part of the overall task they are seeking to complete. Rather than focus on a narrow part of a value chain, companies must either, a) secure their position in the broader digital ecosystem of their value chain by cooperating and collaborating via APIs with other digital players in the network. In this way they work together towards a common goal to achieve complete end-to-end alignment of the value chain for customers, or b) they must acquire or build those business to achieve the same ends.

Such seamless, integrated offerings create new opportunities to address unmet consumer needs and pain points and innovate around them. Collaborative platforms and online market places allow customers and providers, devices, applications, data, products and services to work together and collaborate in new ways and this is core to any digital transformation strategy.

Create value from your data

Companies sit on vast amounts of data. Companies need to mine and make better use of data to create new opportunities and achieve cost savings. The use of advanced analytical and predictive tools and technologies helps to change the interaction model with customers from infrequent and random one off encounters and transactions to more targeted personalised digital encounters promoting repeat rather than one-off sales opportunities and more durable open ended customer relationships. Personalised updated offers or services would also take previous online interactions, purchases, and digital product or service usage data into consideration providing a much richer experience and added value for customers.

Adopt an agile strategy

With customer needs and expectations, technology and the competitive environment changing rapidly, it is no longer realistic to plan for the long term. Agile methods borrowed from software development advocate frequent short iterations of creating, testing, refining and adapting. This promotes a learn-by-doing approach. Companies must rapidly and frequently deliver products and services to meet real consumer needs, try these out, scale up what works or pivot fast when they fail and try something else, This requires an organisational culture that supports agile specifically; individual autonomy, risk taking and experimentation, collaboration and self-organising team effort. It needs an organisational culture that encourages and supports its own disruption. Analogue businesses with an industrial era hierarchical command and control management culture will need to change. In an era of digital transformation, making the necessary personal and cultural adjustments are prerequisites for success. The Internet is not just about technology, people and organisations have to change too. See article: A Necessary Adjustment.

Digitise internal processes and back office

It is necessary but not sufficient to digitise your customer offering. You must also digitise your internal processes and back office to ensure to ensure leanness, agility, and lower cost. Remove manual processes and digitise them. This helps improve performance and is enabler for an agile strategy and better use of data to improve customer experience and increase value.

Foster digital leadership

Digital leaders are different from industrial leaders. They network and collaborate rather own and dictate. They participate and share rather than command and control. They ask the right questions, they disrupt before they are disrupted, they collaborate with or acquire other businesses in their digital ecosystems to provide a seamless integrated end-to-end offering for customers. They make best use of their data to cut costs and provide a richer customer experience as well increase sales opportunities and promote more durable open ended customer relationships. They prototype agile strategies learning from their experiences to do more of what works and pivot fast when they fail. They digitize their internal business processes and back offices to facilitate digital transformation across the whole of the business.

Act

To reiterate, companies that respond to the digital imperative take on fundamental business transformation, operational and implementation risk and significant disruption, but failure to respond to the digital imperative risks a fate far worse than disruption; extinction.

The information technology nuts-and-bolts of the Internet, the bits and bytes, software and servers are relatively easy to get right, the real challenges are personal and cultural. Three significant characteristics have emerged during the Internet’s 25 year history. First, the Internet is a decentralising centrifugal force, second, it is a user-driven democratising force and third, it is a force for openness and transparency. These characteristics are inherent in the very structure of the switch packet topology that forms the intricate interconnectedness that is the Internet. They percolate up from the lowest level of routers and transmission protocols through various layers to seep out into wider society as a force for transformational change and personal empowerment.

Citizens and consumers alike increasingly expect autonomy, openness and transparency of information as well as fully digitised self-serve services with as many transactions conducted online as possible. This requires profound personal and cultural change for producers, service providers and consumers alike. For example, a new term, prosumer, is indicative of the trend towards consumers being able to participate in the creation of the products or services they consume. These characteristics will continue to define and influence our digital future in the coming decades.

Contrast this with the pre-digital industrial age where centripetal forces drew power, influence, command and control to the centre and required an extensive hierarchy of regimented managers and workers to get things done. Many of the colleagues and managers with whom I have worked over the last ten years remain wedded to a 20th (if not 19th) century centralised command and control management ethic.

Such individuals may conduct business on the Internet but are, at best, uncomfortable with or, at worst, ideologically opposed to what the Internet represents. The Internet augers a transformation that is fundamentally at odds with their ethos and personal approach at it challenges their personal preference for hierarchical command and control structures and processes. Seeing themselves as front and centre, they fail to think digitally enough to make the most of what the Internet has to offer. They have yet to make the necessary adjustments to network and collaborate rather than to own and dictate, to participate and share rather than command and control. The centripetal imperative of the 19th and 20th century is finally giving way to a 21st century centrifugal imperative and, in an era of digital transformation, making the necessary personal and cultural adjustments are prerequisites for success. The Internet is not just about technology, people and organisations have to change too.

Using collaborative technologies to connect people, and assist them in undertaking business transactions with payment portals and structured processes has inevitably reinforced the idea that you don’t need a middle man.'

Logan Hall of MoveBubble

The Internet is a disruptive technology melting and reforming business processes and value chains. The Internet makes things cheaper, more open and transparent. Cutting out the middle man it democratises and disintermediates. This has yet to happen fully in the UK property market but change is coming and innovative websites are emerging to challenge traditional high street estate agents.

The key to success will be providing a Facebook or LinkedIn for property, a virtual meeting place and market, a collaborative platform where sellers or landlords can list their properties and connect directly with prospective buyers and tenants. Such a website would be a facilitator rather than an estate agent. This would not be a free for all but a structured process guiding and prompting sellers and buyers, landlords and tenants through the process as well as providing access to property professionals and other services along the journey with case and account management tools and fulfillment and payment portals.

On such a site, a seller could list their property taking a DIY approach to the valuation, description, photos and videos or find and commission a local property expert (LPE) to assist. On the site there would be price comparison tools to find necessary services, to find LPEs, energy assessors to carry out an EPC, services or online tools to produce floor plans and obtain house signs etc. Sellers could manage their own viewing diaries or ask an LPE to do this for them. They could log on to review and manage offers. Buyers could make appointments to view properties direct with owners or LPEs and make offers online, access tools for mortgage advice and offers, conveyancers and payment transfer mechanisms. There would be price comparison tools, suggestions and prompts to find and commission surveyors for home buyers surveys or structural inspections and other services like removal firms, utilities, broadband, curtains and carpets - all services that are required in the course of house sale and purchase. The site would use a flexible pay-for-what-you-use pay-as-you-go fee structure rather than a flat fee or 1.5% of selling price model thus reducing costs substantially.

Many of the new entrants and websites in the property market, Local Surveyors Direct, Local Property Index, EasyProperty, PurpleBricks, CastleSmart, Veyo, Tepilo, MoveBubble provide parts of this puzzle, but there is no one website or vision putting the whole jigsaw together. The company that does so will likely win the race.

Many companies I have worked for recently don’t gain the full benefits of ASP.NET MVC, Entity Framework and Agile. Let me explain.

MVC stands for Model-View-Controller and is an application architecture or design pattern that splits up an application into distinct layers known, unsurprisingly, as Models, Controllers and Views.

User interaction with an MVC application follows a natural cycle, wherein a user takes an action on a web page which launches an http request which is handled by a Controller and in response the application changes its Model, persists or updates some data in a database and then delivers an updated View via the Controller to the user via an HTTP response. This is a good fit for web applications using HTTP.

Most web applications combine HTML mark-up, client side scripts, server side executable code, domain classes, object relational mappers, databases etc. These map very well onto the MVC design pattern splitting the application up into discrete layers leading to a strict and beneficial separation of concerns.

This layering is based on a separation of responsibility where:

1. user interface issues are in the Views and nowhere else,
2. business entities and logic are in the Model and nowhere else,
3. transaction processing logic is in the Controllers and nowhere else,
4. data persistence is in data layer limited to this and nothing else.

As a result components in each layer are also loosely coupled. That is, each layer has a service interface to, but no tangible dependency on, its neighbouring layer. Each layer is essentially a black box that can be swapped out with a different implementation without breaking the overall application.

Compare this with the event driven SMART UI pattern behind ASP.NET Web and Win Forms development. Here there is no separation of concerns. Web and Win forms are relatively easy to write but difficult to read, maintain, extend and test. Due to the tightly coupled architecture testing become challenging, time consuming and resource heavy as source code grows overtime. Changes lead to frequent end-to-end regression testing of the entire application which is painful and costly.

MVC applications are more time consuming to write initially but they are more readable and easier to maintain and extend because of the loosely coupled architecture, tidier nature of the code, and a strict separation of concerns. This facilitates automated testing of layers interdependently of each other through use of fake or mock implementations of interfaces which simulate dependencies and provide predefined data sets and repeatable test scenarios. Automated testing in turn increases the tempo of testing and facilitates continuous integration and release of code changes in short iterations which fits well with Agile application lifecycle management methods.

Agile is essentially about running software development as a rapid and adaptable process of discovery and resisting the encumbrance and restrictions of excessive forwarded planning. It is about short iterations of development effort with frequent feedback and regular releases of small increments of business value to stakeholders usually at the end of fortnightly sprint cycles. The main effort is on domain driven development focusing on representing real world entities as objects in the Model and business logic as methods on those objects. Entity Framework is the glue that permits these objects and their state to be persisted in the database. MVC and Entity Framework goes hand-in-hand with Agile particularly where a separation of concerns permits automated testing and continuous integration.

The business and commercial benefits that flow from the ASP.NET MVC, Entity Framework and Agile are:

• Clients get the right product because Agile encourages flexibility to change and the product is maintainable and extensible allowing requirements to emerge and evolve during development.
• Client gets a quality product as testing is incorporated throughout development and not just at the end of development.
• There is less development waste and rework as deviation and errors are identified early due to frequent product owner and client reviews and feedback thus reducing overall development costs.
• Active involvement of a user representative and/or product owner, together with high visibility of the product and progress, and flexibility to change when needed, creates much better business engagement and customer satisfaction and thus more positive and enduring working relationships.
• In terms of time, budget and scope, Agile helps to fix time and budget and vary scope. Flexibility on scope though, has to work both ways, and in a fixed time fixed cost project, the product owner or client must be prepared trade off items in the product backlog for any new items they wish to include.
• The incremental nature of Agile permits early implementation of some functionality while product development continues and this facilitates a phased revenue stream which helps to reduce commercial risk.

Unfortunately, in many projects, organisations choose to make use of pre-existing databases with stored procedures containing much of the business logic. This leads to  "an insufficient separation of concerns" between the domain Model and persistence layer. The lack of a distinct MVC Model and separate business logic layer reduces scope for automated testing and continuous integration and diminishes the business and commercial benefits that could be available.

Companies considering the use of ASP.NET MVC and Entity Framework together with Agile for their future projects will benefit most on green field projects or on brown field projects where customers can be persuaded to adopt a big bang technology refresh and start from scratch. There is thus the opportunity to:

• abandon legacy data and technical debt,
• craft a discrete MVC Model and conduct domain driven development,
• use Entity Framework Code First to generate the database schema from the MVC model,
• adopt automated testing and continuous integration.

This helps development teams to fully embrace Agile to obtain the commercial and business benefits highlighted earlier in this article.

Nobody wants their personal financial details, business information or photographs to be stolen or held to ransom, so simple things like using three or more words, a mixture of numbers, letters and symbols, upper and lower case letters will make it much more difficult for hackers to access your details.

Director of the National Crime Agency (NCA) National Cyber Crime Unit Jamie Saunders

The challenge is how to make a password sufficiently hard (if not impossible) to crack while at the same time making it easy enough for you to remember.

• Making it hard to crack - Use three random unrelated words as the basis of the password. Use a mixture of upper and lower case letters, as well as numbers and symbols. This increases of combination of characters used making it harder for a hacker to try each permutation when attempting to break your password.
• Making it easy to remember. Tips for creating memorable passwords include:
1. Location method - Imagine a familiar scene and place each item to be remembered in a particular location: glass on the table, sock on bed, photo on desk for example. Imagine yourself looking around the room in the required sequence. Re-imagine the scene and the location of each item when you need to remember the items. Use these items as the three words of your password. G!45550c<ph0t0
2. Acronyms - Use a phrase or a sentence and take the first letter from each word in that phrase or sentence to form your password. I want to remember this very strong password. !wtRtV5P
3. Narrative methods - Remember a sequence of key words by creating a story and littering it with memorable details e.g. ‘the ginger cat hissed at the big black rat in the sewer’ which can also be combined with the Acronyms method eg tGcH4tbbR!t5

It is vital to use a different password for each login. In reality this means using a password manager or a password vault application which allows you to remember one strong master password that you can use to encrypt, protect and access the others.

More advice is available at:

https://www.gov.uk/government/news/three-quarters-of-britons-risking-online-safety

https://www.cyberstreetwise.com/

The benefits of an Agile software development approach are well known. Agile invites change and refinement of scope throughout the lifecycle of a project to help organisations converge on the right product for clients. This is achieved through short iterations of development effort with frequent feedback during each iteration rather than a single big but often disappointing ‘ta-da’ at the end of the project. How then does Agile work in a fixed price contract where not only is price fixed but time and scope are fixed as well? Indeed, how do you estimate an Agile project to determine a realistic fixed price in the first place?

At first glance a fixed price contract implies a traditional waterfall approach, i.e. a tightly defined signed-off specification with no deviation on price, time or scope. This appears to be in tension with Agile which encourages change as an essential component of the process.  As we will see in this article it is possible to embrace change in a fixed price project by varying the scope.

To estimate a fixed price project in Agile you need to know the velocity of your Agile team in terms of story points, i.e how many user stories of what size and complexity the team can get through in a two week iteration or sprint. Estimates are measured in story points rather than in man hours. These are an arbitrary measure of the relatively size and complexity of user stories and are usually based on the Fibonacci sequence (1,2,3,5,8,13,21,34,55,89,144) or a Fibonacci-like sequence (1, 2, 3, 5, 8, 13, 20, 40, 100) as this helps to emphasise the relative size and complexity of user stories in the product backlog. The bigger and more complex a user story, the higher the story points value. User stories are simply functional requirements expressed in terms that users and stakeholders in the business can understand for example – “As a Customer I can view and amend my online shopping basket.” This can then be broken down into smaller implementation tasks for a development team.

To estimate a project in terms of time you can use the formula:

Time = (total project story points / team velocity) * iteration length

So for example, if your team's velocity is 25 story points per two week iteration and the product backlog of user stories for the project has a total of 250 story points then we can estimate the time as:

Time = (250 / 25) * 2 = 20 weeks or 10 iterations or sprints.

Assuming a 7.5 hour day and a team of 5 and an hourly rate of £20 per hour we can estimate the cost of the project using the formula:

Cost = hours per iterations * number of iterations * people * hourly rate

So that …

Cost = 75 hours * 10 * 5 * £20 = £75,000

We have estimated the project will take 20 weeks and cost £75,000 so we are then in a better position to negotiate sensibly on the commercial aspects of the contract including any contingency and a margin for profit.

As the project progresses and changes emerge we can embrace this change in a number of ways. If the client changes their mind and wants another 20 story point user story added to the project then, because the project is fixed price and fixed time, this can only be achieved by removing another user story of equivalent story point value from the project.

Alternatively, where product backlog items can be given a MOSCOW priority then user stories prioritised as Shoulds and Coulds may be omitted if more time and effort is required for the Musts or new Musts are added due to new scope discovery during Sprints. In this way we can maintain the fixed price and deadline by adjusting scope. If all the product backlog items in the project are Musts and there is little room to manage scope in this way, then the client will need to make a difficult decision to remove Musts from scope risking viability of the product or they will need to agree to extend the project by the required number of iterations and provide additional funding.