How to Make a Fixed Cost Pricing Model Work for You
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In this post we will examine the specifics of utilizing a fixed-price model by IT professionals, possible pitfalls and how to avoid them.
In this post we will examine the specifics of utilizing a fixed-price model by IT professionals, possible pitfalls and how to avoid them.
Depending on the character of a project, it is possible to choose one of the two pricing models – Fixed-price (FP) or Time and Materials (T&M). Some projects go well with a FP model, others are not recommended because of high risks incurred for both parties.
We draw a distinct line between the two pricing models in terms of their use. However, our clients sometimes press for signing fixed-price contracts rather than paying per hour regardless. Why would they knowingly choose the no-win option?