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Why Fixed Price is a Bad Idea in Software Development

As a professional Phoenix custom software design and development company we often take over custom software development projects after the relationship with a fixed-price software development company has turned sour. The fixed-price pricing model for software and web application development projects may sound attractive to a customer initially, but unfortunately, both parties will most likely suffer in the end.

A fixed-price contract happens when the customer is guaranteed a fixed price to complete certain tasks and/or provide specific variables. A fixed-price contract might also have a limit for expenses, in which case the customer cannot be billed for any amount over these limits. In any arrangement of this kind, the specifications must be complete and detailed and the contract must allow adjustments to the price for any variation to the agreed-upon specifications. 

The only fixed-bid software projects that have a chance of success are those which cover additional time, in the event the software development company has underestimated how long it will take to complete the project. Estimating is often the hardest part of any software development project. Estimating a project’s timeline is never an exact science, especially for custom projects which may entail unexpected needs and wants on the part of the client, leading to “scope creep”; or unforeseen technical issues that are often out of the control of the software developer, leading to spending additional time to provide a “work-around”.

In business, it can be difficult to agree ahead of time on the scope of an entire project, and determining the specific details of the software requirements and performance criteria is no different. Similar to custom building a home, the unexpected and unforeseen will often occur in the middle of the process. While software design specifications and features may be decided upon in advance, building the actual product, taking into account the high degree of detail necessary, and leaving little room for interpretation is very costly and not always a good use of the client's resources and money. 

At the end of the day, the most important consideration is the final product and its overall fit and performance.  When considering a fixed-bid contract, whether client or developer, ensuring a quality end product is paramount. 

For the client, fully understanding project needs and outcomes, and working with a trusted company can go a long way to ensuring a successful outcome. When working with a new developer, consider starting with a smaller project, a kind of test run to ensure compatibility before delivering a larger project – especially one that may entail a fixed-price agreement.

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Implementing Your Disaster Recovery Plan

We have all heard stories about what’s lost during natural disasters – homes, businesses; in cities waterlogged during southern hurricanes, California and Colorado wildfires that consume entire communities. While major events like these, which cause millions of dollars in damage, occur on a limited basis, a different kind of disaster catches businesses by surprise every day: data loss. Seemingly mundane in comparison and you may think that the chance of this occurring may be relatively small, yet this type of disaster can have a huge impact on your business, resulting in loss of time, loss of productivity, revenue and, potentially, clients.

Data loss can occur in any number of ways including human error, computer virus, hardware or system failure, software corruption, data or cyber theft, as well as natural disasters. The remedy is to have a Disaster Recovery and Implementation Plan in place, to ensure data is adequately protected and can be recovered in a timely manner after the system breach.

Your disaster recovery plan is an important part of your business and the consequences of not having one can easily be underestimated. When disaster hits, the question is: Will you be ready?


A How-To Guide

Human beings tend to act like the proverbial ostrich-with-its-head-in-the-sand when it comes to preparing for unpleasant events. But when disaster strikes, regardless of the cause, the feeling of being able to recover data will offer peace of mind and allow you and your team to confidently move forward. What are the first steps you should take? Where do you turn? This quick overview can help.

  1. Choose responsible people. You cannot properly get your disaster recovery plan off the ground if you don’t have great people around you to help. As you build the actual plan, be sure you have responsible people in charge of the process.
  2. Upgrade regularly. Over time, your company is going to change. As it does, your disaster recovery plan has to change too. Be sure it’s updated as often as is necessary to keep up with your company.
  3. Get the right help. Planning for disaster recovery is not as simple as pulling a template off the internet. Instead, choose an IT consulting firm to help.

When you’re ready to get serious about disaster recovery planning, there is no better place to turn than Kinetik IT, where we’ll walk you through every step of disaster recovery planning.


To learn more about services and products – including implementing your tailored plan if and when it becomes necessary – visit or follow Kinetik on Facebook, LinkedInor Twitter.