When it comes to engaging a consultant, you will find literally hundreds of articles on the advantages and disadvantages of going with a fixed price versus a time & materials project approach.
Most tell you it comes down to the same combination of factors:
Most companies believe that requiring a vendor or consultant to bid fixed price is a way of mitigating risk. But, given most projects will encounter unforeseen obstacles or challenges, the only way the vendor or consultant can offset their own risk is by charging a contingency fee. So, the real question for most companies is level of risk versus cost.
Qlik adds a whole new dimension to a project given the ease to setup the software and create/change apps. Therefore, Qlik almost always utilizes a time & materials approach, giving our clients the most flexibility as we often can save hours somewhere or, worse case, add a few hours when the unforeseen happens.
But sometimes, our clients choose a fixed price approach. But does that approach save or cost them money?
To answer this question, I spoke with one of our most experienced Qlik consultants, Sajid Shaikh, who has managed some very complex technical projects over the past 20+ years he’s worked in the industry. Sajid told me about a Qlik project that he knew, from the start, was going to involve thousands of hours of work, and the client – for internal reasons – required us to use a fixed price approach.
As Sajid explained, the success of this project would be based on ensuring there was full agreement from all parties on the scope, responsibilities and a realistic plan. So, he required the client to conduct a stand-alone, multi-week engagement to detail out every aspect of the project. For Qlik time & materials projects, this wouldn’t have been necessary, but for fixed price, it is an absolute necessity to protect both the client and Qlik.
Once the plan and scope was agreed upon, the project began and – as expected – challenges did come up. Most were caused by data not being of sufficient quality, the responsibility of the client, which they chose to engage Qlik Consulting to address with separate engagements. But, when all was said and done, the project was a success and the client was extremely happy with the result.
Did the client benefit from requiring a fixed price approach? Did it cost them more money? Yes, due to the multi-week scoping engagement and the contingency. Did it enforce all parties to stay to the initially agreed scope? YES! So, in the end, it may have saved the customer money.
The one disadvantage a time & materials project can create is the ability for the client to add or change scope. Especially with Qlik, clients can get caught in a cycle of constantly doing “one more thing”. However, this can be easily remedied by taking a little bit of time up front to define and agree on scope, and then manage the project with the same degree of discipline as IF it were a fixed price project. But some clients feel like this may inhibit their flexibility.
So, in the end, it’s a question of the client’s tolerance for risk and their ability to apply the same rigors of scope management that decides what is the right project approach.To learn more about how Qlik Consulting can help you manage your Qlik projects more effectively, visit us here