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I found this really insightful as someone who runs a small consultancy/professional services department within a larger company. I agree with a lot of what he's

I found this really insightful as someone who runs a small consultancy/professional services department within a larger company. I agree with a lot of what he's written (some terminology aside), but we have different perspectives on billing. My department's engagements are exclusively 'fixed-bid projects'. Truth be told, I'd prefer hourly billing as it reduces our risk. There is an omnipresent danger that we've horribly under-estimated the effort required to deliver a project, but the customer isn't concerned about that. They are interested in minimizing their own risk. And the fixed bid is a guarantee of X results for $Y, which has more safeties in place. I suppose that's why the author has to explicitly spell out how to fire him.

AdieuToLogic 4y ago
> There is an omnipresent danger that we've horribly under-estimated the effort required to deliver a project, but the customer isn't concerned about that. Which is why the author states: > These require highly detailed specifications that list exactly what is expected of the consultant. If it's not entirely clear what the requirements are, there will be endless disagreements over whether this or that is in the scope of work: The customer will think it is (you work for free), and you will think it isn't (customer pay me more). And when you say: > They are interested in minimizing their own risk. You are entirely correct in that this is what customers want. What this also implies is risk is transferred to the consultancy if the aforementioned detailed specifications (contract) does not exist or is sufficiently vague. > And the fixed bid is a guarantee of X results for $Y, which has more safeties in place. If and only if the specifications are inflexible or recourse has been established such that "scope creep" can be negotiated. Otherwise, the only "safeties in place" are that $Y is all a customer will pay, no matter what X becomes.

AdieuToLogic 4y ago

> There is an omnipresent danger that we've horribly under-estimated the effort required to deliver a project, but the customer isn't concerned about that. Which is why the author states: > These require highly detailed specifications that list exactly what is expected of the consultant. If it's not entirely clear what the requirements are, there will be endless disagreements over whether this or that is in the scope of work: The customer will think it is (you work for free), and you will think it isn't (customer pay me more). And when you say: > They are interested in minimizing their own risk. You are entirely correct in that this is what customers want. What this also implies is risk is transferred to the consultancy if the aforementioned detailed specifications (contract) does not exist or is sufficiently vague. > And the fixed bid is a guarantee of X results for $Y, which has more safeties in place. If and only if the specifications are inflexible or recourse has been established such that "scope creep" can be negotiated. Otherwise, the only "safeties in place" are that $Y is all a customer will pay, no matter what X becomes.