Outsourcing Mistakes: Negotiating Terms (Billing Type)
Max 1 min read
This video is about making mistakes when choosing a payment type. The main problem is this: people assume that if they set a fixed price, their risks are hedged. As far as your financial risks are concerned, this is true. But there is another side of the coin – in the product development, a lot of unknown details appear, which leads to the expansion of the project. Cost fixing limits your project’s growth.
A few recommendations:
- Be flexible – the waterfall development model doesn’t work anymore!
- Move towards the goal in short sprints – it has long been proven that it is impossible to predict the project’s scope at the very beginning.
- Be ready for changes (sometimes as early as week one or two into development).
- Do not choose a fixed price if your project will last for 4 months.
If you do choose a fixed cost, make sure that all requirements, expected results, and order acceptance criteria are also fixed.
