This was an interesting article. I’ve been involved in software consulting in the past, and this sort of mugging does sometimes occur in fixed-price projects. I think that there are several take-aways from this:
fixed-price projects are a lot higher risk (to the service provider) than are time and materials projects. This is true even if the service-provider is good at estimation and applies appropriate buffer in the schedule/pricing.
fixed-price projects require a skilled project manager who can recognize and manage scope creep (intentional and otherwise)
fixed-price projects require diligence up-front in crafting an unambiguous statement of work or contract
one-person or small project teams without a dedicated project manager should think twice before accepting fixed-price assignments
The last bullet is worth emphasizing; some technical people, wishing to stay focused on the work, will acquiesce to scope creep (particularly if introduced incrementally) to avoid getting involved in time-consuming and potentially adversarial discussions with the client. This can make manager-less teams particularly vulnerable to this type of mugging. An experienced project manager can often mitigate this danger.
I’ve seen the mugging go the other direction as well on fixed-cost, particularly in extremely large contracts; companies put low-bids in, then charge exorbitant rates on even the smallest changes to the requirements (and there are always changes). And with non-fixed price projects, the mugging in the other direction is even easier. People in IT don’t pay nearly enough attention to reputation.
But yeah. It’s very easy for individuals and small companies to get caught in this, especially if, say, your mortgage payment is due soon.
This was an interesting article. I’ve been involved in software consulting in the past, and this sort of mugging does sometimes occur in fixed-price projects. I think that there are several take-aways from this:
fixed-price projects are a lot higher risk (to the service provider) than are time and materials projects. This is true even if the service-provider is good at estimation and applies appropriate buffer in the schedule/pricing.
fixed-price projects require a skilled project manager who can recognize and manage scope creep (intentional and otherwise)
fixed-price projects require diligence up-front in crafting an unambiguous statement of work or contract
one-person or small project teams without a dedicated project manager should think twice before accepting fixed-price assignments
The last bullet is worth emphasizing; some technical people, wishing to stay focused on the work, will acquiesce to scope creep (particularly if introduced incrementally) to avoid getting involved in time-consuming and potentially adversarial discussions with the client. This can make manager-less teams particularly vulnerable to this type of mugging. An experienced project manager can often mitigate this danger.
I’ve seen the mugging go the other direction as well on fixed-cost, particularly in extremely large contracts; companies put low-bids in, then charge exorbitant rates on even the smallest changes to the requirements (and there are always changes). And with non-fixed price projects, the mugging in the other direction is even easier. People in IT don’t pay nearly enough attention to reputation.
But yeah. It’s very easy for individuals and small companies to get caught in this, especially if, say, your mortgage payment is due soon.
Yes, it can happen in the other direction too.