What’s the best way to pay for a project; Fixed Cost or Time and Materials?
• If you opt for an ‘off the shelf’ system then this isn’t a consideration but if you choose a bespoke system or a customised system this is very important. To begin with – what’s the difference? With fixed cost the vendor sets a price and that’s what you pay – no matter how long the project takes. With time and materials the vendor gives you an idea of the total cost but charges you by the day. Let’s start with time and materials. Never ever choose this option. It may sound tempting; the software may not take as long to develop as the vendor estimated so you’ll save money. The reality is that whilst the software may be delivered on time it will almost certainly have required more developer/days of effort to produce and WILL end up costing you more. Now let’s consider fixed cost projects. The problem with fixed cost is that the vendor has to be certain that they can complete the project for the budgeted cost. Beware of vendors that give fixed costs from the start, before the applicatio
