The basic situation is the company I work for has bought a big software package. The vendor submitted a fixed price tender to supply, configure and install the software. Fixed price contacts sound great in concept but anyone who's dealt with them knows their shortcoming.
Whether you're building a house or installing software, there are always things you didn't allow for. You, the buyer, want these things when they come to light and the supplier says "Sure, you can have that but it's a change to the contract which means I have to charge you more."
One of three things happens now:
- You don't get what you want so you're dissatisfied with the end result
- You pay more so you're dissatisfied with the final cost
- You have a big fight over whether or not this is a change and the relationship becomes really adversarial which is no fun for anybody
We seem to be stuck with outcome 3. And as the Business Analyst I'm stuck in the middle of the business Project Manager and the vendor Project Manager. I've been imagining the scenario playing out on the Titanic as follows:
ME: Iceberg, dead ahead!
Business PM: Quick, get us past the iceberg.
Vendor PM: There was no mention of icebergs in the contract.
BPM: So what? There's an iceberg there now, we have to deal with it.
VPM: We can deal with the iceberg but we'll have to charge you for a change request.
BPM: But the owners won't agree to pay any more. They wanted you to steer the ship for a fixed price.
VPM: But there were no icebergs in the original plan. It's going to take time to deal with it and we'll have to charge you for it. You'll have to document what you want us to do.
BPM: I can't believe you've never encountered icebergs in any of your other ships, what did you do in similar situations?
VPM: I talked to the owner and he was clear he wanted the ship to reach its destination as quickly as possible so we configured the navigation differently. Don't you have any existing processes for dealing with icebergs?
ME: Kind of. People just do whatever's required to deal with situations as the come up. There are some guidelines like "don't hit icebergs" but there's no detailed instructions. That's why we hired you, for your expertise.
VPM: We can come up with a solution but we'll have to bill you for the time.
BPM: There are other cruise lines thinking of installing similar systems on their ships but they're waiting to see how things turn out for us. Isn't it more important to your future to deliver a good result to us than to screw every possible dollar out of us here and now?
VPM: But I can't keep ordering my engineers to do more and more work when we signed on for a fixed price. I have no more money to pay them.
ME: Oh shit! The iceberg just ripped a big hole in the hull. We're sinking.
BPM: You have to help us now or we'll all sink together.
VPM: We have to agree on a change request first.
ME: You two go off and have a meeting then, leave me out of it.
BPM: What are you going to do?
ME: I'm going to throw myself into the icy water and hope I die quickly.