As I sometimes do, I’m blogging based on a search term someone used in order to find this blog. Today, I write about this search phrase: “why is lims market so hard to estimate”

In reading this, I think what the person doing the search is probably trying to figure out is to understand why the projects are so difficult to estimate. Here are five reasons:

  1. Services. The larger the project, the more services it will require but even the smallest projects tend to need some amount of services. Services are more difficult to estimate than product licenses. People new to the industry think the project estimates will be more a matter of adding-up some amount of license and maintenance fees, and that’s not where the bulk of money comes into play in most estimates.
  2. Bad estimating. In many areas of our industry, people have refused to estimate the implementations in a realistic manner. They have refused to learn how to estimate these software projects, which is what they really are. Or, in some cases, people have made the effort to make good estimates but just happen to have poor estimation skills.
  3. Underestimation. Some companies seem to almost purposely underestimate projects. After all, once the customer spends a certain amount of money, they’re unlikely to just abandon the project if it’s going to cost more. Then, they keep bleeding the customer for yet more-and-more money. Whether the truly and consciously do it on purpose is really the question but since they’re perfectly happy continuing to make poor estimates and not to try to do any better, I’d say that that’s a purposeful act.
  4. Lack of information. It’s both hard for customers new to the industry to know exactly what information to provide and it’s sometimes difficult for the software vendors and services vendors to know how to elicit that information. Even when you’re trained in this and have experience, there are times when there is something major missing that no-one quite identifies until much too late in the process.
  5. Overall misconception of project scope. We call many of these systems COTS (commerical off-the-shelf) systems which customers take to mean that they will need minimal services to make work, but the reality is that there’s as much programming going on as there ever was. We find new euphemisms for it, calling it “scripting” or “configuration” and making excuses that the programming language being used isn’t like the “real” programming languages, but these systems remain complicated and time-consuming to implement. On the sales side, there is too much time spent pretending this isn’t so, and on the customer side, a lack of awareness in too many cases.

Gloria Metrick
GeoMetrick Enterprises

4 Thoughts to “Why is LIMS Market So Hard to Estimate?”

  1. What is the difference between a bad estimate and an underestimate? It seems that if you underestimate it is a bad estimate. For a LIMS company that underestimates, I think they run the almost definite risk of losing money. Most LIMS projects are fixed price projects for a fixed scope defined by the customer.

    1. Possibly, that was not the best use of terms. By “bad estimating” I meant to suggest that some estimates are poorly done. “Underestimating” was something I meant as a purposeful act.

      However, there are more projects that have gone to time-and-materials than there used to be, for one. For another, once the system goes-live and the estimate is merely for new services as opposed to any licenses, this is sometimes done as time-and-materials. On top of that, even with fixed price, some companies will argue that whatever it was that the customer thought they needed really isn’t included in that fixed price. Sometimes, it’s a mistake or misconception somewhere in the process, but other times, the person who did the estimating is trying to get out of what they promised.

      As for GeoMetrick Enterprises, I only provide time-and-material work – no fixed price. For that, I often work with customers on a “not to exceed” quote where we’ll try to overestimate to give a little cushion and I work to keep under that mark.

      Or, for another example, I recently told a customer that I knew what they needed would take between 10 and 20 hours and we discussed whether they wanted to estimate for something in-between or the top hours of 20. Different purchasing departments actually have different theories on this.

      Working with customers and their purchasing departments, I’ve found that some prefer to overestimate so that they never need another purchase order – that their purchasing departments don’t want to be bothered multiple times. On the other hand, some purchasing departments don’t like this practice. They don’t like to see lots of unused money planned-for, that way. Another issue is that different people have the ability to sign for different amounts of money. If we’re working with the LIMS Admin, they’re usually going to their manager who has a lower cost signoff ability than if you’re working on the initial implementation, where sometimes it’s the upper managers and directors who are signing-off on these things.

      In any case, when I get a new customers, I try asking them if they know how their process works. If they don’t, I give them a few options to ask about and see what their management and purchasing folks tell them they have to do, but the questions I give them to ask get them started on the process, at least.

  2. Wow!, a rather complex answer to this topic but I do think it reflects reality. With so much variability, I can only say that every LIMS vendor/consultant simply needs to work in a client centric manner but do it within the scope and terms of the contract. If either party deviates from that, then one or both parties will be on the short end of the stick.

    Clients are not naive and if they are, they will not be clients very long. Both parties must be adult and business like and must know their contracts and work to the contracts. There are all sorts of stunts that both parties can pull but nature has a way of cleaning up the stunts and it is usually not very pretty.

    The LIMS market is getting very mature and stunts that used to go on simply are no longer a real problem in the industry. Clients have gone through multiple implementations and vendors have gone through 100’s if not 1000’s of implementations. That market experience is what is causing the LIMS market to be very mature. A mature market will see lower prices, more functionality, better quality and shorter implementation times.

    All of that being said, the different approaches to purchasing remain exactly the same. Some go in style and others out of style and that wheel seems to go in regular cycles.

    1. Keep in-mind that there are always new customers coming into the industry. There will always be new people coming into roles at the established customers, as well. Some of these people will learn from what others have already done but not all companies set that up where the new people have that support system. In any case, there are always new people out there and our industry doesn’t seem to be able to easily reach new people. Established people know where to look for information but new people wouldn’t necessarily know where to find some of the useful resources to help them understand some of the issues they need to face.

Comments are closed.