Setting up your project for success
Custom software development services is not a commodity, but sometimes it is treated that way. Inevitably, every month we get 2 or 3 clients that call us that have been burnt by a different software company or a developer they found. Often, it was the “lowest bidder.” Unfortunately, this is an industry where some studies show that up to half of the projects end in failure. By the time they are calling us, the poor client has sunk in tens of thousands of dollars with nothing to show for it and are back to square one. They are usually less price sensitive at this point and more concerned about the project outcome.
Furthermore, once a client is in a fixed bid arrangement with a vendor (whether us or any other vendor), there is a significant amount of effort that goes into discussing the defined scope of the original contract. Often times, the client does not know exactly what they want at the beginning of the project. They have an approximate idea. As the project starts to take shape and screenshots/prototypes are reviewed, there is almost always new ideas or changes in directions. In a fixed bid contract, it now becomes very important if the change is a replacement of scope of the original fixed bid, or if it is a change request with additional cost associated. In a Time and Material contract, there is no wasted time/effort on determining whether or not a modification is in scope or out of scope. If the client wants something changed, then it is just done. This may seem like a small issue, but it is not. Significant time and effort is spent on determining the classification of scope changes. It is a constant negotiation throughout the project.
A concern that some clients have about Time and Materials is that they might get pulled into an open-ended contract with no checks or limitations on budget. Or, the vendor may be lazy or incompetent. These are real concerns and it takes time to build up trust to make a T&M relationship work well. One of our best practices is to review progress early and often with the client. It builds trust and the client can quickly see the value they are receiving for their money. Also, we work with the client to prioritize and deprioritize features to hit a budget that the customer wants to stay within. In custom development, there are always options and trade-offs.