Time and Materials with Fixed Scope and a Cost Ceiling
10-06-2019Phased Development
12-06-2019Desired Benefit: Enable decision making within the project while maintaining control over the costs.
Structure: Same as Time and Materials except a cost ceiling limits the financial risk of the customer.
Scope: Same as a Fixed Price, Fixed Scope project.
Decision-Making: Much more likely to be in the Scrum team, because decisions are made during the project about what functionality shall be included.
Risks: The budget will expire without achieving the necessary business value for the customer. Customer won’t get everything they ask for.
Relationship: Cooperative. The combination of limited budget and variable scope focuses both customer and vendor on achieving the desired business value within the available budget.
Tip: From experience, I would say this contract form mixes well with Scrum. The customer has control over each individual sprint. A constructive relationship means that even if problems develop on the way, the emotions are right to come to a mutually agreeable solution.