Businesses looking to implement
Fixed Fee means Fixed Scope – if an implementation partner is going to have a fixed limit on what they can bill, they have to limit what the scope of the project is. Otherwise they will be entering an open ended commitment that could be a huge drain on resources. The deliverables of the project will be narrowly defined, and items you uncover during implementation may get skipped because of these limitations.
You still may be overpaying – if a partner has to come up with a number they are sure will work and cover all potential unexpected possibilities that may arise, it is fair to assume they are giving you the high end of their estimate range. In a time and material project, you may come in at the low part of the estimate, and therefore pay less.
Phase II work may be harder to get approved – if your company is structured so that purchase must get approved by a board that is not active in day to day operations (often the case at Non-Profits), there can be a perception that Fixed Fee was covering “all the bases”. Asking from funds for a Phase II project may raise questions of why the work was not done in the first go around.
There are times when a fixed fee is a must, and certainly it is a legitimate thing to request. Just make sure you understand the potential downside.