The Guaranteed Minimum Scope is a remuneration model for software development contracts that takes into account the uncertainty in the effort estimate while limiting the cost risk for the client. This remuneration model enables a fair risk sharing between the parties. It is not uncommon for Agile software development projects. This remuneration model guarantees a minimum functional scope of the software application. Thus, the client has the certainty that he will receive a viable software product. If the actual effort is below the initially estimated effort, then the "unused time" will be used to implement more features from the backlog, that are beyond the "minimum scope".

Of course, this requires transparency about the actually generated effort. In the construction industry (where this remuneration model was originally developed), the books of the contractor are disclosed. In the IT industry, such transparency on incurred costs can be established quite easily: Software Development is a People business (except some travel costs and the purchase of proprietary libraries). Therefore it's in most cases sufficient to share a detailed time sheet for each IT professional of the contractor.

Author

Sebastian Zang has cultivated a distinguished career in the IT industry, leading a wide range of software initiatives with a strong emphasis on automation and corporate growth. In his current role as Vice President Partners & Alliances at Beta Systems Software AG, he draws on his extensive expertise to spearhead global technological innovation. A graduate of Universität Passau, Sebastian brings a wealth of international experience, having worked across diverse markets and industries. In addition to his technical acumen, he is widely recognized for his thought leadership in areas such as automation, artificial intelligence, and business strategy.