Fixed Fee Projects

Why Fixed Fee Projects Fail

There is rarely a winner in a fixed fee engagement and if there is one from time to time, it’s more likely than not to be the supplier rather than the buyer.

Despite some supplier claims to the contrary, without detailed planning and a clear description of the project at hand, a fixed fee offer is nonsensical. It’s nonsensical even after detailed planning as mid-market projects involve many moving parts the most important being people who often invite changes to scope, service delivery and solution and therefore project time and cost.

Suppliers rarely if ever link a fixed fee service to a guaranteed outcome across every project service. It’s a quick road to ruin doing so. Granted, some services support such an approach, but most don’t.

Often a fixed fee project is based on a defined set of services being supplied for an agreed fee. Such an arrangement is generally accompanied by a long list of terms and conditions or caveats that protect the supplier. Silence over what happens when the number of hours of training required for instance in the fixed fee prove to be insufficient, can be extraordinarily expensive.