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I'm working at a consultancy, and fixed priced projects are the worst. Clients get greedy and want every little detail they come up with implemented. When thin

I'm working at a consultancy, and fixed priced projects are the worst. Clients get greedy and want every little detail they come up with implemented. When things turn out more complex than expected, you have to deliver shoddy work instead of decreasing scope and at the end of the project you ended up adding a feature they asked for halfway through and now they are complaining that the feature it superseeded wasn't in the final delivery. In hourly projects, the clients are so much easier to talk to. If something turns out more difficult than expected, they are willing to reprioritise. If they ask for an extra feature hafway through, they are willing to pay for it, or let something else go.

viraptor 6y ago
That's a different extreme though. In the middle, you can do a "phase N paid X will include Y" contact and if they want to add features halfway, you can both update the plan and payment details.
Cthulhu_ 6y ago
We tried it at my previous company once, we had a setup where customers could pay per 2-week sprint. What they tried to do was get more work done outside of that timeframe by reporting bugs in the delivered work. Bugs that were basically missed features. Before that my company tried a fixed price project; they sold 8 weeks of work, but to make a profit we had to quickly finish everything in the 6th week, maybe one more guy on the project in the 7th for the last bits. That was a bit shit.
ilaksh 6y ago
That's why fixed price projects should not exist. Really. It's one of the worst business practices out there.
Silhouette 6y ago
If you're going to do fixed price, you really need a proper spec, change management process and approval process defined up-front. If the project isn't large enough to justify that or the participants aren't willing to do it, going fixed price is almost inevitably going to cause problems. On the other hand, if you do have a reasonably clear idea of what you want up front as the client, and if you do have a reasonably clear idea of what it will take to achieve that as the service provider, a fixed-price contract on reasonable terms can work to both parties' advantage. The client gets a degree of certainty from early on that they would not have with time-based pricing. The service provider assumes the risk but is better able to judge it, and can price based on the value they are offering to the client and the degree of risk involved, potentially increasing their margin considerably while still having happy clients.

viraptor 6y ago

That's a different extreme though. In the middle, you can do a "phase N paid X will include Y" contact and if they want to add features halfway, you can both update the plan and payment details.

Cthulhu_ 6y ago

We tried it at my previous company once, we had a setup where customers could pay per 2-week sprint. What they tried to do was get more work done outside of that timeframe by reporting bugs in the delivered work. Bugs that were basically missed features. Before that my company tried a fixed price project; they sold 8 weeks of work, but to make a profit we had to quickly finish everything in the 6th week, maybe one more guy on the project in the 7th for the last bits. That was a bit shit.

ilaksh 6y ago

That's why fixed price projects should not exist. Really. It's one of the worst business practices out there.

Silhouette 6y ago

If you're going to do fixed price, you really need a proper spec, change management process and approval process defined up-front. If the project isn't large enough to justify that or the participants aren't willing to do it, going fixed price is almost inevitably going to cause problems. On the other hand, if you do have a reasonably clear idea of what you want up front as the client, and if you do have a reasonably clear idea of what it will take to achieve that as the service provider, a fixed-price contract on reasonable terms can work to both parties' advantage. The client gets a degree of certainty from early on that they would not have with time-based pricing. The service provider assumes the risk but is better able to judge it, and can price based on the value they are offering to the client and the degree of risk involved, potentially increasing their margin considerably while still having happy clients.