Suppose you hired a sculptor to make a big image of John Wayne to put outside your city hall or airport. Would you expect to agree on a fixed price in advance? Or pay him by the hour and see how long it takes? In this latter case, aren’t you actually incentivising him to take longer? After all, that way he makes more money!
Of course you don’t want the artist calling up and saying “Sorry, I underestimated the number of hours and now it is going to cost you more to put the head on.”
So today’s name award goes to all the namers (and other creative professionals) who do projects on a fixed price basis – and regardless of the size of the agreed fee, they deliver for that fee on a timely basis, even if it takes them more iterations than they expected. After all, we too are artists trying to satisfy a discerning client and public. We too need to put the head on all our projects.
Between me and my husband we’ve owned more MP3 players over the years than I can count, including Sansas, iRivers, iPods (classic & touch), the Ibiza Rhapsody, etc. But, the last few years I’ve settled down to one line of players. Why? Because I was happy to discover how well-designed and fun to use the underappreciated (and widely mocked) Zunes are.
Often he wants a fixed-price bid which means that functionality quality and price are all fixed. The rationale behind this approach is that the customer wants to transfer the project risk to his suppliers.