Now let me tell you what I want this thing to do....

A friend of mine likes to tell this story from his early days as a software consultant. His team had spec'd out a system for a client, and implemented it in somewhat more than three the time they'd included in the contract. Even though they'd lost their shirts, they were full of excitement as they delivered their shiny new application to the client. After the walkthru, the big guy tipped back in his seat, smiled, and said: "This is great. Now let me tell you what I want this thing to DO." The other night over Indian food I heard the same story from the other side of the desk. A friend who works with a non-profit here in DC was talking about the nightmare installation her group had been suffering through for a year now. They are still waiting for the developer to understand the sort of features they need to really support their workflow. He does deliver a new version every few weeks, but each change seems to break something else. "But I'll bet they're really sorry they agreed to do this for a fixed price" she concluded. I'm sure they are. But so is she. When Members Only Software was just starting out, we frequently sold our product in a fixed price engagement - basically saying "We will do what it takes to customize our application for your organization. We will do this for an amount of money we will agree on now, even though we have only a vague idea of what it is you will need." This approach created good clients, who had few special needs; and problem clients, who had many needs. Later we learned to charge for all of our time. We used to think this would make it difficult to give the client a clear project budget. But that's not true. It's easy to stick to a maximum figure - its just that in this reality the user may not be able to afford everything they would like. This reality encourages everyone to prioritize, and by setting a fixed number of hours to the engagement, makes it much more likely a defined project actually reaches completion. Amazingly, it also made all clients good clients. The ones with lots of special needs were suddenly sources of revenue, not drains on our time. This in turn was a benefit for our clients with smaller budgets, who could not afford customization but were excited to see the new features that would show up in our service packs as the fruit of someone else's custom need.