Tuesday 4 November 2008

Thoughts about fixed-priced projects

Negotiating is domain area, which for most people is much more complicated to deal with, then even the most challenging technical task.
Once during one of our Agile club we have discussed fixed-priced contracts and applying agile methodologies to them.

This was quite hot topic: audience consisted of mainly agile adepts, but the projects they were involved indeed where fixed-prices.

In generally that discussion is not worth to retell it entirely, but there were some thoughts that may be very much valuable for me.

1. Above all, fixed-priced projects are normally more expensive and that means they are potentially more lucrative for executor (for IT company or team that works on them). It's a high price for professionalism. If I were millionaire I would rather have 100% service for 100% price:
I don't need analysts, testers, QA, IT department from my side to support YOUR development. I don't care if it's 400% more expensive: just give me entire calculation and risks and I will put your proposal under consideration.

So team has a good opportunity to provide product owner from their side and to make fair product for good price.

2. Commit or not commit that the question.
And all risks should be calculated before project is started

Here I have exposed one more thought: can we reuse that approaches that is used by venture capitalist when they do their business in IT
Unfortunately not: normally venture capitalists' approach is to be aware and to be acquainted with people: but they have money to take over risk, we don't :(

3. Fixed price project can be conducted as agile projects, but all necessary infrastructure should be provided by executor.

One of my colleagues proposed idea to specify if customer is opened or not. So if he ready for communication that better if he is not.

I also had thought about that: but I'd rather just exclude projects that depend on single non-responsive person as not good for me.
Just make me happy and don't ask any questions.

If your customer is large organization it's not a big problem if they are remote and not responsive. I've seen so many times when customer's representative not provided enough analyst or information about their product or requirements. But I have never seen customer that forbade their coworkers to speak with our coworkers.
Even in the worst case you anyway can talk with them, have discussions, drink bear or date their office managers.
You do have chance take information about how to make them happy (unless your customer is not Jesuits Order).
The costs of all this is a different thing. But since account management has word "presentation costs" normal business used to work with them, so IT business also have to.
So, viva forever! :)

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