[thelist] development time cost on new functionality

Matt Warden mwarden at gmail.com
Wed Jul 20 08:37:44 CDT 2011

On Wed, Jul 20, 2011 at 1:49 AM, Ken Schaefer <Ken at adopenstatic.com> wrote:
> So, going back to Matt's post: T&M is not about "leaving money on the table". There's a right way to execute and a wrong way. And what is right in a particular engagement depends on the constraints, assumptions and even just the general policies of the client. It has nothing to do with leaving money on the table - neither Accenture nor HP are in business to do that.
> Given that both of those two companies are reasonably successful, do a lot of deals, and generally have to have some smarts about them in structuring deal otherwise they'd be out-of-business pretty quick, I'm inclined to trust empirical evidence over the ideological "there is only one right way" inflexible opinion of a random guy on the internet.

Not sure what the confusion is. My issue with your statement about T&M
was that you said "that's just the way T&M works", meaning that it is
excusable to leave money on the table because that's the way you
structured your billing. That is silly.

The rest of what you said here, I agree with. There is nothing magic
about fixed price services work. You either take on the variability
risk and get a premium to do so, or your client does and gets a
discount to do so. Think of T&M as a 2-year Adjustable Rate Mortgage
and fixed prices as a 30 yr fixed mortgage.

But we are once again veering off into complete offtopicness. The
topic here is not services organizations in general or which billing
method is the coolest for a consulting gig. This is about how to bill
for a solution/product that is already built, and THAT is where it is
absolutely foolish to bill T&M, because you either have to be
unethical in your invoice or you leave money on the table. It's that
simple. I don't understand why that is a controversial statement with
some people here.

Matt Warden

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