Open-sources vs. Custom Developed Modules

Open-sources vs. Custom Developed Modules

Risk Exposure can be calculated as follows:
RE = Probability of the risk x Cost

Sometimes we can’t go for custom development for each module required in an application. And sometimes we can’t exactly use the open-sources.

e.g.

If you are going to implement a shopping cart, video portal or a picture cart so there are few open-sources are available:

1. Videos – http://www.phpmotion.com
2. Pictures – http://www.picturespro.com
3. Products – http://www.opencart.com

One must will go with 70% to 80% with developed modules of these projects but still 20% to 30% will require modifications. Which will involve following risks and their probabilities.

Risk:
– Only 70% of the software components scheduled for reuse will, in fact, be
integrated into the application. The remaining functionality will have to be
custom developed.

• Risk Probability – 80% likely (i.e. 0.8)
• Risk impact

  – 60 reusable software components were planned. If only 70% can be used,
  18 components would have to be developed from scratch. Since the average component will cost 100,000, the total cost will be 1,800,000.

• Therefore, RE = 0.8 * 1,800,000 = 1,440,000

Management/Contingency Plan Will be:

1. RE computed to 1,440,000. Allocate this amount within project contingency cost.
2. Develop revised schedule assuming 18 additional components will have to be custom-built.
3. Allocate staff accordingly.