Project-based development or monthly capacity: how to decide

The right question

“How much does it cost?” may seem like the first question, but the one that determines the modality is different: how well do you know what you need? If you can describe the result in detail and it is unlikely to change, a fixed project makes sense. If you know the problem but not the solution, or the work is ongoing, a monthly capacity engagement usually fits better.

The two modalities

Signals to choose a project

• You can write clear acceptance criteria.
• Business rules are defined and won’t change soon.
• There is a date or milestone that matters.
• The work ends: after that there is only maintenance.

Signals to choose monthly capacity

• You have a list of improvements that changes with the business.
• You need to experiment before deciding the final solution.
• There are systems in use that require continuous attention.
• You prefer to prioritize each month based on results.

The limits of each

A fixed project loses sense when the scope is discovered along the way: every change becomes a negotiation and the scope grows out of control, which Atlassian describes as “scope creep.” A monthly capacity arrangement loses sense when no one prioritizes: hours are spent on the urgent and not the important. In both cases, the solution is the same discipline: written scope, clear priorities and verifiable acceptance.

Mixing is valid

Many companies start with a project to build the foundation and then switch to a monthly capacity to evolve it. The reverse is also possible: use monthly capacity to discover what is needed and then close a project. What matters is that each phase has its own rules.

Decision procedure

1. Describe the problem and the expected outcome.
2. Answer the downloadable decision guide.
3. If most answers point to certainty, prepare a fixed scope.
4. If they point to uncertainty or continuity, define how capacity will be prioritized and measured.
5. Before signing, review the conditions of the chosen modality with your provider and, if applicable, with your advisor.

Applied example

How to use the downloadable guide

1. Answer the eight questions with your team.
2. Count which modality they point to.
3. Review the “Before deciding” list.
4. Bring the result to the conversation with your provider.

Decision criteria in detail

Complete concise example

Concise example. A fictional company needs two things: a portal for its distributors to download datasheets and continuous improvements to its internal ordering system.

The portal has clear users, pages and permissions: they hire it as a project, with scope, acceptance criteria and exclusions. The improvements to the ordering system change every month according to what the commercial area requests: they hire those as monthly capacity, with a prioritization meeting every two weeks and a monthly report of what was delivered.

By separating the two needs, they avoid adding unforeseen improvements into the portal project and avoid paying monthly capacity for something that had a closed scope. Invented example.

Common mistakes, explained

Choosing a project when you don’t know what you need leads to constant changes and scope discussions. Choosing monthly capacity without someone on your side to prioritize leads to paying for hours without direction. In both cases, the modality does not replace management: someone from your company must decide what to do and verify what is delivered.

How to know if it worked

• You know why you chose each modality.
• There is someone from your company who prioritizes and verifies.
• You review results each month or at each delivery.

Plan for the first four weeks

1. Week 1: describe needs and certainty.
2. Week 2: answer the decision guide.
3. Week 3: talk with the provider about conditions.
4. Week 4: define how you will measure progress.

Diagnosis before starting

• Write what you need and how sure you are about it.
• Review how many changes your last project had.
• Identify who in your company can prioritize each month.

A second example, in contrast

Concise example. A fictional company hires monthly capacity to build a new application, thinking this will give them flexibility. Without someone to prioritize, the hours are used on minor adjustments. They switch to a fixed project with closed scope for the first version and keep monthly capacity for later. Unlike the first example, the initial modality was wrong. Invented example.

What to do when something fails

• If changes overwhelm a project, pause and reestimate the scope.
• If monthly capacity does not show progress, review prioritization.
• If you change modality, document the state of the work.

How to measure it with your own data

• For a project: compare the agreed dates and scope with what was delivered.
• For monthly capacity: review what was delivered each month against what was prioritized.
• Count the changes requested and their effect on schedule.
• Record how many decisions remained waiting on your company.

With those records you can evaluate whether the chosen modality remains appropriate. If changes in a project don’t stop, you may have needed monthly capacity. If in monthly capacity the prioritized items are never completed, perhaps someone to prioritize is missing or the work should have been closed as a project.

Frequent mistakes

• Hiring a fixed project with a one-page vague scope.
• Hiring monthly capacity without someone to prioritize.
• Not measuring what was delivered each month.
• Treating scope changes as if they were part of the original project.

Checklist

• Problem and outcome described.
• Level of certainty evaluated.
• Prioritization method defined.
• Progress measurement method defined.
• Conditions reviewed with the provider.