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Showing posts from July, 2010

Missing link

Last Sunday morning I went to gym. After working out I came out to find one tire was punctured. Just out of the gym and with the macho spirit I replaced the tire. Then reached home some 15 minutes late. My wife was waiting for me and she was angry. We are going to be late for the function we were attending. I started telling her all about punctured tire and how I replaced it. I was expecting some appreciation for my effort in replacing the tire. But all I got was “You could have called me? I could have picked you up and later we could have fixed your car.” This also happens in projects. We do lots of things for the customer. But if there is a small delay customer is upset. Same happens here. Missing item is communication. If you just mention to the customer we just added this feature. But it is breaking your main function. Customer may not be upset as much. But no communication and missing delivery will definitely upset the customer. Any gold plating will not smooth the rough edges. On
Myth of fixed price contracts: Typical understanding of a fixed price contract is it transfers the risk to the vendor. Yes, it does transfer some risks to the vendor. But not significant one’s unless vendor is foolish and suicidal. Let us analyze fixed price contract. Perceived benefits to customer: a)      Risk is transferred to vendor When a fixed price contract is given it is agreed that vendor will deliver the project at that cost. Whatever issues vendor experiences, he is bound to deliver the results. There can even be penalty clauses for delays in delivery. b)      Budget is fixed. No more bureaucracy. You got the budget approved for the project. There is really no worry to get extra money sanctioned for the project from the head office. This may not be issue with many organizations, but for some this is a serious issue. Getting new amount sanctioned during the year will take more effort than getting new project sanctioned. This is a political reason in few organizations. c)