Fixed Price Projects and Agile, or The Scariest Nightmare

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Fixed price contract is by itself the greatest nightmare in the project manager’s life. But when it is combined with agile development frameworks – scrum/kanban/etc – it becomes also a tricky nightmare.

Usually, when clients ask you for “fix price” they mean: fixed money, fixed scope, fixed time. Some of the most reasonable clients I worked with on fixed price projects told me “We are not crazy! Let’s not fix the time! But we should be live till the 1st of June, we have this marketing campaign, you know…”

Even if you work in the “so agile” software development company there is the day when the sales manager comes to you and says: “Hi! We have a new project. I have a bad and a good news for you. The bad one is that it is fixed price, I know how you hate it. But the great one is that you can still your agile, client is ok with it”. So, let’s discuss what you, as PM, can do in this situation.

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Why time & materials?

It is one of the first questions PM hears from the client. From the client’s side the ideal situation will be: receive the application he desires for the fixed price and fixed time. And no excuses) But is it as simple as the client thinks? I tied to gather the cons of the fixed price projects and pros of time & materials to prove my point of view – either client and developer receive a great benefits if they work on a time&materials contract.

Continue reading Why time & materials?