Hello all.
I do believe it is time for another rant from me. I like to think people find these a charming part of my eccentric personality, but I’m not so sure.
However, despite that, I want to rant about fixed-price projects and how stupid they are. But before I do, I want to caveat what I am about to say by clarifying that I believe a fixed price can work for small web design projects. However, beyond that, they suck.
We Cannot Accurately Scope Projects Upfront
We all seem to live in the same consensual hallucination where we can scope web projects upfront based on prophetic insight!
There are too many variables to predict in most web projects, even if we knew the exact scope upfront (which we never do). Variables such as:
- The results of user research.
- Unanticipated technical barriers.
- Stakeholder engagement and approval.
- Legal or regulatory issues.
- Unexpected changes in user behavior.
- Different stakeholder interpretations of the scope.
You get the idea.
Fixed Price Projects Undermine Your Ability to Adapt
It would still be a bad idea even if you could lock down the scope upfront. It would undermine your ability to adapt to what you learn. We treat scope creep as the enemy, but it is simply the result of everybody learning more about what is needed. It is considered bad because we insist on locking everything down from the start.
What is the point of user research and testing if you cannot adapt based on your learning? Why involve other stakeholders if the project is too inflexible to accommodate their feedback?
Estimating is Preferable
Don’t misunderstand me; I am not suggesting we go into projects blind and with an unlimited budget. Estimating the cost and scope of a project is essential. However, everybody must understand that it is an estimate and will likely be wildly inaccurate instead of lying to ourselves that it is a realistic prediction.
A Fixed Price is Damaging
I understand clients wanting to tie a supplier down to a fixed price, but it is unrealistic. It can only lead to one of two possible outcomes.
Either the supplier massively overestimates the project’s price, meaning the client has to pay more than necessary, or the project devolves into debates about scope. In both cases, the client loses. They either pay more or get a website that incorporates none of the learnings from the process.
Also, these uninformed prices and scopes almost always lead to conflict. Even on in-house projects, it can often result in management complaining projects have gone over budget and the in-house team arguing it was due to scope creep.
How Non-Fixed Price Projects Work
Instead, the supplier can produce an estimate based on their previous experience. However, the project should be run on a time and materials basis with constant adaptation of either scope or budget agreed upon by all those involved. Also, it should be clear that the estimate is precisely that – an estimate.
If the client wants an estimate that is as accurate as possible, start with a discovery project to allow the supplier to conduct user research and better scope out potential barriers. Following that, they should be able to provide a better estimate for the project as a whole.
If the client wants even more control, the supplier could cost a prototyping phase that would be estimated more accurately because of the discovery phase. Once the prototype is complete, this could act as a functional specification for the build, ensuring the estimate for that phase is more accurate.
Be Willing to Say No
Look, I know clients and stakeholders aren’t going to stop asking for a fixed price, but that doesn’t mean we have to give it to them. Many of those I coach are pleasantly surprised when they shift to talking about estimates and breaking the project down into phases for more accurate costing. Most clients understand the logic in that; we just have to have the confidence to try.
