Over the course of the past 30 months, my company had completed over 26 different large scale Asterisk based projects and over 40 small scale projects. Whenever we encounter a new project, we are always faced with the same issues: “What makes a project big or small? how do you quantify the price/charge for a specific project? – and most importantly, what is the nominal value a project may carry – in order for the customer to do the project on one hand and with my company on the other hand”.

At GreenfieldTech, we take high pride at the “no hidden costs” methodology. This means that when you get a price quote, you’ll get a complete price quote for everything, ranging from consulting, through development up to install and support – nothing is left out, nothing is left for chance. Initially, it makes for a slightly higher price, however, when compared to other price quotes – it is simpler to read and to the point. However, most companies don’t work in such a methodology, thus, the price quote will usually be based upon “The umbrella concept”.

The manual opening umbrella

The manual opening umbrella is one of the oldest methodologies in the world, and is taken from the world of construction. The idea is very simple: the customer receives a highly enticing low entry price and pays an arm and a leg for each change or addition.

Many solution providers who utilize this methodology do so by simply creating an overly complicated price quote, a highly detailed specification document that doesn’t say much – usually followed by the ever annoying sales person indicating that: “oh, that’s not covered in the original quote, that will be an extra”. Solution providers utilizing this methodology usually do so due to a simple fact: “They have no clear solution track or a clear view of the end goal”. The project would usually lengthen beyond the projected time scale, usually by a factor of more than 30%, ending up in losses or law suits.

The customer will usually try to protect itself by contractually obliging the solution provider to a specific end of project date, with specific penalties. However, my experience shows that while the penalties are fairly often utilized, these are not utilized to the fullest – mainly due to the fact that the customer wants the project completed, while the solution provider may halt the project pending a proper ruling on the the matter – in other words, the customer is in a lose-lose scenario.

The spring opening umbrella

This methodology is slightly faster than the previous one, where the solution provider will provide a slightly less complicated price quote – however, will include many disclaimers into the price quote – indicating various changes of pricing and high margins of price change at will. The most common practice for this methodology is to indicate that: “Actual price will be calculated according to the actual work performed”. This methodology is very much common in the “Work-Only” or “Consulting” business, where there is no set time frame. What happens many times is that the consultant would linger the initial contracted work, then, as the contracted time reaches its end – it will “spring” out a new indication that a new purchase order is required. Now, working according to the above methodology seams like a good way for the customer to protect itself, however, in many cases – it is exactly the opposite.

So, what are we supposed to do?

A good consultant should be able to distinguish between a “project base” job and a “hours basis” job. When choosing a consultant, verify that his history of projects is versatile, which means, that he’s able to acustom himself to your requirments – both technical and financial. Flexability is a virtue, however, if a consultant is too flexible, it is usually an indication of poor experience or complete lack of it. Most consultant who are taking a certain job “type” for the first time would lower their cost, mainly to get the job – however, they would utilize their customer to “learn the ropes”. There is nothing wrong with learning the ropes on your customer’s expense, as long as the customer is aware of it.

Remember, as consultant we have duty to our customers first then to our business. Sure, we are all in this for the money, after all, that’s what puts food on the table and pays the bills, however, the needs of your customer come first. If you are unable to price a project on your own, consult with other freelancers and reach out to them. Tell them your story and your dilemma, usually, someone had already encountered such an issue in the past – and will be able to render a solid and useful advice.