Interesting! I've been guilty of bashing fixed price projects and not getting involved in that gig, but it sounds like you can learn an awful lot from seeing the mistakes and problems.
I love how you focus on "play the game you're playing" in this post. I'm skeptical that true agile ideas (versus Agile processes) couldn't help a FPP but hey - I've never seen it done well, so maybe not!
I believe agile software development can be very valuable in projects. Building working product increments to catch early customer feedback is still a great early warning system.
But most of these capital-A Agile frameworks center around exploration and discovery. We catch feedback and reestimate because we don't trust the customer to know what they want. That's great for building products, but not for delivering projects.
All that exploring and discovering comes out of your own pocket.
You don't want to explore in a fixed-price project. You want to build what was agreed upon.
I've never understood companies that don't keep the team responsible for the delivery fully informed about the costs they're incurring and the margins. Without all the information they cannot optimise the for the desired outcome.
That's because a lot of managers also don't see a FPP as a high-risk, high-reward bet. They are convinced the estimate should match reality more or less. Cutting into the margin is bad for business in that mindset. The €150K profit is not the "best case scenario" but the goal for them.
There are also other reasons to keep margins close to your vest. When I was a young consultant I was shocked when I found out how much they were charging for my days compared to how much I got. At that age I didn't get margins, CAC, overhead or risk. It just felt like unfair profits to me. That can be bad for morale.
But even if you don't share the margins with the entire team, the PM needs to know them.
Likewise knowing the margins early in my career it did seem like I was getting a bad deal - I viewed it as a learning opportunity, but I get and agree with your point on morale.
It's by definition not impossible. If it were, no one would be doing them.
From a developer point of view it's challenging. From a business point of view it's lucrative.
FPP are bets and that means the reward should match the risk. There's plenty of customers who love to pay more to offload the risk of software development to their vendor.
Interesting! I've been guilty of bashing fixed price projects and not getting involved in that gig, but it sounds like you can learn an awful lot from seeing the mistakes and problems.
I love how you focus on "play the game you're playing" in this post. I'm skeptical that true agile ideas (versus Agile processes) couldn't help a FPP but hey - I've never seen it done well, so maybe not!
I believe agile software development can be very valuable in projects. Building working product increments to catch early customer feedback is still a great early warning system.
But most of these capital-A Agile frameworks center around exploration and discovery. We catch feedback and reestimate because we don't trust the customer to know what they want. That's great for building products, but not for delivering projects.
All that exploring and discovering comes out of your own pocket.
You don't want to explore in a fixed-price project. You want to build what was agreed upon.
I've never understood companies that don't keep the team responsible for the delivery fully informed about the costs they're incurring and the margins. Without all the information they cannot optimise the for the desired outcome.
That's because a lot of managers also don't see a FPP as a high-risk, high-reward bet. They are convinced the estimate should match reality more or less. Cutting into the margin is bad for business in that mindset. The €150K profit is not the "best case scenario" but the goal for them.
There are also other reasons to keep margins close to your vest. When I was a young consultant I was shocked when I found out how much they were charging for my days compared to how much I got. At that age I didn't get margins, CAC, overhead or risk. It just felt like unfair profits to me. That can be bad for morale.
But even if you don't share the margins with the entire team, the PM needs to know them.
Likewise knowing the margins early in my career it did seem like I was getting a bad deal - I viewed it as a learning opportunity, but I get and agree with your point on morale.
I don't know how anyone does fixed price projects. It's impossible.
It's by definition not impossible. If it were, no one would be doing them.
From a developer point of view it's challenging. From a business point of view it's lucrative.
FPP are bets and that means the reward should match the risk. There's plenty of customers who love to pay more to offload the risk of software development to their vendor.
It's not impossible, there are plenty of businesses that deliver them profitably.