Previously we discussed the pros and cons of fixed price vs. hourly contracts. We followed up with a discussion about the difficulty of estimation, the importance of setting a “least acceptable outcome”, and budgeting well above that point.
- Fixed price contracts provide clients with the illusion of budget clarity, but at the cost of inflexibility.
- Hourly arrangements seem ideal… for the agency. After all, the longer the project takes, the more money the agency makes.
For most clients, paying by the hour is a necessary evil. But is there a better approach?