Open Insights 19 – Avoiding A Fixed Fee Fix

OPEN INSIGHTS
Issue 19 – Avoiding A Fixed Fee Fix
May 1, 2006
by Sean Hull
Founder and Senior Consultant
Heavyweight Internet Group


Welcome to our free monthly newsletter, discussing news, developments and business best practices at the intersection of Oracle and Open Source software.

In This Issue:
1. Feature: Avoiding A Fixed Fee Fix
2. Audio Interviews
3. Current Reading
4. Lightweight Humor
5. Miscellaneous
6. Past Issues
7. Technical Articles
8. About Heavyweight Internet Group

1. Feature: Avoiding A Fixed Fee Fix

Recently I ran into some confusion and hit some roadblocks with a client over a fixed fee project. That inspired my thoughts, and insights in this month’s newsletter.

The Spirit and Letter of a Contract
Depending on the total cost of your project, or the piece of your project, it may or may not make sense to hire a lawyer to draft a complicated contract to cover all eventualities. Even if you have such a contract, it often remains difficult to stay on the path you paved. There are various boiler plate contracts on the internet, and I urge you to review them, and look for one which retains the fewest pages, and least complicated legalese and speaks more in plain language. Be sure to add in bullet points on what both parties intend to accomplish. Also include a clause that says the contract represents the entire agreement between the parties, and any amendments must be made in writing and signed by both parties. Furthermore keep in mind that if the contract is between two named corporate entities, a dispute cannot be settled in small claims court, and therefore both parties would need to hire lawyers.

One more thing to keep in mind. Lawyers often talk about the letter and the spirit of the contract. That’s because written english can never completely capture the idea two parties have about something. You make every effort to include details, but there is always ambiguity. If there weren’t, where would disputes come from? Keep asking questions, and looking for differences, and try to resolve them now between yourselves, and get those resolutions in writing. The more ironed out, the closer the letter of the contract will capture the spirit of the agreement you’ve come to. I’ll admit that no matter how many times I consider this piece, it remains extremely difficult. At the point you are about to sign an agreement, you don’t want to bring up anything that will prevent both parties from agreeing, but at the same time you want to be clear and honest about what you expect. Only real-life experience can make you better at this.

Holding Hands + Frequent Calls

With a new client, this can be the hardest part. Both parties are just getting to know each other, and just building a relationship. So there is a period of demonstration, and proving competence. This is very important, and consultants and freelancer’s often take this to mean, put in the extra effort, and go the extra mile. In addition, the promise of long-term work often stands out in front as an added incentive. Unfortunately such loosening of the reigns can allow projects and scope to expand and grow beyond the project outlines. I emphasize great caution here. You want very much to maintain your good relationship, but you also want to closely manage your fixed scope, necessarily implied by your agreed upon fixed fee. With that in mind I also emphasize frequent calls. Discuss the developments, difficulties, and hurdles you’re encountering as you’re encountering them. Don’t wait to mention a problem until it builds up to be a real obstacle.

Hitting Walls

With a fixed scope, discipline and prudence must be maintained. This is fortunate for the cost of a project as it doesn’t grow and expand, but it means you’re going to be saying “We can’t do that.” early on. You won’t be saying it out of ability, but rather out of practical constraints. But try to leave yourself a small golden parachute. Put some clauses in the contract that account for some expected walls, and how to route around them. You can even bill hourly for items which fall outside your agreed upon scope. But manage this. Let the client know during the contract negotiation what your concerns are both verbally, and in writing, and as issues come up mention them before they boil over.

There’s Light At The End Of The Tunnel
Above all, don’t lose hope. Differences can very often be resolved when all parties come to the table with an open mind, and give each other a fair chance to speak. Be frank, and sincere, and keep the end goal in mind.

Conclusions
Fixed fees, if managed carefully can be great for all parties. They can wrap an entire project into one lump sum that a company can easily budget and plan for, without trying to debate whether hourly fees make sense, or what those hourly fees will come to at the end. And if rounded out properly you may make some additional profit off of tasks you manage and perform regularly. However all aspects much be managed closely, else your road may take you into wild country.

2. Audio Interviews
We have a great audio interview or podcast that you’re sure to enjoy. We talk with Paul Vallee, Founder and President of Pythian Group, about their use of Open-source technologies in the enterprise, and why they’ve taken the reigns to maintain a Perl to Oracle library called DBD::Oracle. Click here for more.

Do you use Open-source technologies in your enterprise? Would you like to talk about your experiences, and business successes? We’d like to hear from you. Email me at shull@iheavy.com

3. Current Reading

Art of SQL – Stephane Faroult
In this phenomenal book on SQL, the language of getting data in and out of databases, Stephane takes a fresh approach. Using The Art of War by Sun Tzu as a metaphor for doing battle with your data, he takes you on a new journey through the trials and tribulations of modern database application tuning.

You The Smart Patient – Michael Roizen, Mehmet Oz
Drs Roizen and Oz take us on a guided tour through our modern world of medicine, helping us negotiate insurance, choose a doctor, and understand some of the common ailments and how to help our doctors help us.

Free Culture – Lawrence Lessig
Lawrence Lessig is a professor of law at Standfort Law School, and specializes in copyright and intellectual property especially in relation to discourse online. In this book he inspires, and encourages us to consider the dangers of putting too much of the control of copyright in the hands of big-business and media conglomerates.

4. Lightweight Humor
Back in The Onion archives, I found this hilarious article which is as funny today as it was in 1998!

Evil Genius Gates Drops Windows 98 Into NYC Water Supply

5. Miscellaneous
Learn from these audio interviews of great entrepreneurs and business leaders with Venture Voice Podcasts.

Monster.com is sponsoring some interesting podcast interviews by great business and other management gurus with Career Advice Podcasts.

Want to get a better idea of the job markets? Check out Indeed.com’s Jobtrends.

Keith Ferrazzi, author of previously mentioned “Never Eat Alone” a book about networking, and building relationships for your career, as a Tip of the Week.

6. Past Issues
Issue 18: The Cost of Consulting
Issue 17: Secrets Of The Interview
Issue 16: Success In Juggling
Issue 15: Marketing About Technology
Archive: Past Issues

7. Technical Articles
Oracle9i + RAC on Linux/Firewire: click here
Migrating MySQL to Oracle: click here
MySQL Disaster Recovery: click here

8. About Heavyweight Internet Group
In a nutshell, Oracle. Everything related to and surrounding the database technology we specialize in, but specifically setup, admin and tuning of Oracle technology. I have 10 years experience with Oracle, wrote a book on the technology, and write and lecture frequently. I’m founder and senior consultant of the company. In capacities where your company might hire Deloitte, AIG, or Oracle Consulting we can bring the same level of service and experience, at about half the price. Simple equation.

Visit us on the web at iheavy.com.