I still run into a lot of companies that have the expectation that software development can be done on a fixed-price basis. They’re either still used to waterfall management style, or dealing with goods vendors, or, maybe a few are still running into software developers willing to work on a fixed-price basis.
On this blog, we’ve talked about the dangers inherent in fixed-price development services. How companies willing to offer an FPB will triple their hourly rate for change requests in order to make up the margin they already know exists between what they think the project will cost, and what it actually will end up costing. How every project, no matter how well planned out, rarely looks the same at the finish as it did at the start. How the number of unknowns at the start of a development project could fill a dump truck. What we haven’t talked much about is when it is reasonable to ask for, or expect, a fixed price. (more…)