Fixed price has taken root in custom development

[tanjimajuha20]

Anna Shvedova, head of business solutions at IT company SimbirSoft, said that according to the results of a study conducted by the company, one of the stable trends in 2022 in custom development was interest in fixed-price development.

"The departure of foreign vendors has generated increased attention to development among companies dealing with large volumes of data and established business processes based on certain systems - ERP, CRM, WMS and the like. Moreover, more and more clients - 21% versus 12% in 2021 - wanted to receive a project at a fixed cost, within a clear deadline and for a limited budget," noted Anna Shvedova.

The expert said that, according to canada mobile number database the company's forecasts, the number of requests for fixed prices will grow in 2023. "This type of cooperation scheme is most often of interest to customers outside the IT sector who are not very familiar with IT development processes, but have a fixed budget. As a rule, these are companies from the public sector, sometimes from the industrial or banking sectors. But "fixed" only seems like a convenient cooperation model at first glance. It seems that when all tasks are planned, it is easier for the customer to track the development process and deadlines. The client has a fixed volume of tasks, deadlines and budget, but may face risks. In practice, such a development scheme imposes restrictions on both the contractor and the customer. When assessing a task, the client cannot always answer technical questions, and they are of the greatest importance for projects using this format of work," explained Anna Shvedova.

Mikhail Smirnov, Director of Production at Develonica (Softline Group), believes that the number of customers willing to work at a fixed price will increase in 2023. "Automation is a complex and lengthy process. It is very difficult to say in advance how much it will cost to develop a product. If the project has a fixed price, then all the problems with increasing project costs fall on the contractor, and the customer is relieved of responsibility," he explains.

According to him, the advantages for customers in such a scheme of work are that the cost of the project does not increase for any reason. The disadvantages are that it is difficult to find a good contractor for a large project, since he may simply not take it on due to high risks. "There are also advantages for the developer in such a scheme of work. If he is highly specialized, professionally understands this particular industry and already has extensive experience in it, then he can sell the services at a fixed price again for more," noted Mikhail Smirnov.

According to him, the demand for fixed-price development has increased significantly in 2022. "Tender platforms have become popular. The customer simply chooses a company that will offer the most favorable conditions and project cost. Now this is a very popular scheme for finding contractors. First of all, fixed-price work is popular with government agencies. This is due to the fact that their budgets are allocated for all expenses in advance. Therefore, it is more difficult for them to work under any other schemes - cost items are fixed. And large commercial companies with budget planning processes. That is, those who have complex budget approval schemes," explained the production director of the Develonica company.