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Actual for You - Beyond Repair: The Fixed-price Model
THE 8 ASCENTS OF THE ULTIMATE LEADER (Continued from Part I) are the Psychological foundations of what makes a great Leader, they are...1. Master Your Rules of Engagement• In War, "Rules of Engagement" are what you do when you engage the enemy.• The enemy in this case is experience of when your surroundings don't match your perception of ‘what should be'• Psychological "Rules of Engagement" exist as reaction responses to these surroundings and the experiences, if you become more aware of what they are, you will have a foundation to influence your actions and reactions, you will Master your Rules of Engagement2.
As soon as the fixed price DBA determines that "it is not the DB", the client is on their own trying to correct an issue where a DBA could be invaluable in diagnosis and building a plan for corrective action.
5. Fixed pricing estimates are high. They are high on a per hour basis and
A few years ago I worked with three other coaches to facilitate a program for a medium-sized financial services company. The company was started several years earlier by their up-and-coming CEO and is still privately held. Our program was built around the topic of internal communications. This company has always had a great outward appearance to its customers, but internally there was much room for improvement. We hoped to tag on to some additional work there, including coaching for their managers and above as well as additional group facilitation.The CEO liked the work we did, but regarding any future business with his c
1. Fixed pricing is designed to function with the absolute minimum amount of human attention. The more the company does not work for the client, the higher the profit. This creates an adversarial system where the caretakers fight to do as little work as possible no matter how much they are being paid.
2. Fixed pricing encourages wastage. Since a fixed price contractor has an hourly rate in mind - say $120/hr - then when they quote $12,000 per month, that really means that they intend to spend no more than 100 hours per month on your account. But if near the end of the month they have only done 20 hours, for example, then what happens to the other 80 hours? Nothing. You would have received inferior services for an astronomical hourly rate and have no recourse to approach the contractor and ask that they put in a little TLC.
3. Fixed pricing encourages increased risk. This one has a little math behind it: If a problem can be corrected in 1 hour but has a 10% chance of reoccurring in 2 months, or can be corrected in 5 hours and will never happen again, the fixed price contractor will always pick the 1 hour solution. Why? Imagine that they have 10 different clients with the same problem. They can spend 50 hours fixing it the right way for everyone, or spend 10 hours fixing them all the wrong way knowing that only 1 in the 10 (10%) will have a problem in 2 months (incurring another 1 hour then). Therefore, the total time saved by doing it the wrong way is 39 hours. A huge savings to the contractor.
Now imagine if that problem has downtime or data loss associated to it. This will never factor into their profitability equation.
4. Fixed pricing can be deceptive as far as measure of quality. Take database administration, for example, since that's what I know best. The measure of the DBA job in a fixed price model is to ensure that the database is up. Performance improvement or dealing with performance decline is not even in the contract. Also missing is any diagnosis of complex performance or network issues which may involve more than one piece of the architecture puzzle.
As soon as the fixed price DBA determines that "it is not the DB", the client is on their own trying to correct an issue where a DBA could be invaluable in diagnosis and building a plan for corrective action.
5. Fixed pricing estimates are high. They are high on a per hour basis and o
Restaurateurs fail to get past one store because of one reason. Restaurateurs fail to make boatloads of money because of one reason.The one reason...they are too busy working in their business, not on it. How can you possibly expect to have time to manage the store when you are running it? You’re bussing tables, working the bar, helping out in the kitchen. You’re running food, cashing out servers, making schedule changes, covering shifts and dealing with the phone. You’re making table visits; you’re even running an ad in the local paper. But you know what? It’s not enough. The definition of insanit
1. Fixed pricing is designed to function with the absolute minimum amount of human attention. The more the company does not work for the client, the higher the profit. This creates an adversarial system where the caretakers fight to do as little work as possible no matter how much they are being paid.
2. Fixed pricing encourages wastage. Since a fixed price contractor has an hourly rate in mind - say $120/hr - then when they quote $12,000 per month, that really means that they intend to spend no more than 100 hours per month on your account. But if near the end of the month they have only done 20 hours, for example, then what happens to the other 80 hours? Nothing. You would have received inferior services for an astronomical hourly rate and have no recourse to approach the contractor and ask that they put in a little TLC.
3. Fixed pricing encourages increased risk. This one has a little math behind it: If a problem can be corrected in 1 hour but has a 10% chance of reoccurring in 2 months, or can be corrected in 5 hours and will never happen again, the fixed price contractor will always pick the 1 hour solution. Why? Imagine that they have 10 different clients with the same problem. They can spend 50 hours fixing it the right way for everyone, or spend 10 hours fixing them all the wrong way knowing that only 1 in the 10 (10%) will have a problem in 2 months (incurring another 1 hour then). Therefore, the total time saved by doing it the wrong way is 39 hours. A huge savings to the contractor.
Now imagine if that problem has downtime or data loss associated to it. This will never factor into their profitability equation.
4. Fixed pricing can be deceptive as far as measure of quality. Take database administration, for example, since that's what I know best. The measure of the DBA job in a fixed price model is to ensure that the database is up. Performance improvement or dealing with performance decline is not even in the contract. Also missing is any diagnosis of complex performance or network issues which may involve more than one piece of the architecture puzzle.
As soon as the fixed price DBA determines that "it is not the DB", the client is on their own trying to correct an issue where a DBA could be invaluable in diagnosis and building a plan for corrective action.
5. Fixed pricing estimates are high. They are high on a per hour basis and
Every business works within the context of core beliefs. We have developed beliefs that define how we work with clients, lenders and investors. We consider them to be guiding principles that, if applied, will improve the quality of your business plan as well as the quality of your relationships with others. We share them with you in this article in the hope that you will find these beliefs worthy of adopting in your business as well.Belief 1: Every business needs a written, organized business plan.Every business, regardless of size, has goals and plans for where it will be in the future. These goals and plans
3. Fixed pricing encourages increased risk. This one has a little math behind it: If a problem can be corrected in 1 hour but has a 10% chance of reoccurring in 2 months, or can be corrected in 5 hours and will never happen again, the fixed price contractor will always pick the 1 hour solution. Why? Imagine that they have 10 different clients with the same problem. They can spend 50 hours fixing it the right way for everyone, or spend 10 hours fixing them all the wrong way knowing that only 1 in the 10 (10%) will have a problem in 2 months (incurring another 1 hour then). Therefore, the total time saved by doing it the wrong way is 39 hours. A huge savings to the contractor.
Now imagine if that problem has downtime or data loss associated to it. This will never factor into their profitability equation.
4. Fixed pricing can be deceptive as far as measure of quality. Take database administration, for example, since that's what I know best. The measure of the DBA job in a fixed price model is to ensure that the database is up. Performance improvement or dealing with performance decline is not even in the contract. Also missing is any diagnosis of complex performance or network issues which may involve more than one piece of the architecture puzzle.
As soon as the fixed price DBA determines that "it is not the DB", the client is on their own trying to correct an issue where a DBA could be invaluable in diagnosis and building a plan for corrective action.
5. Fixed pricing estimates are high. They are high on a per hour basis and
1. Ask Around. Find out from friends and colleagues who they use and if they would recommend them. If the designer did a good job, they will be more than happy to pass on their details. 2. Collect Examples. Make a collection of designs you like/don’t like, and give reasons for your choices, this will help you later. Find out who produced the work. Most designers will credit their work if it is on a flyer, poster or website for instance. If you love the look of a company’s brochure, try phoning them and asking who the design company was. I doubt they will mind you phoning, as it’s to praise their good judgement! fferent clients with the same problem. They can spend 50 hours fixing it the right way for everyone, or spend 10 hours fixing them all the wrong way knowing that only 1 in the 10 (10%) will have a problem in 2 months (incurring another 1 hour then). Therefore, the total time saved by doing it the wrong way is 39 hours. A huge savings to the contractor.
Now imagine if that problem has downtime or data loss associated to it. This will never factor into their profitability equation.
4. Fixed pricing can be deceptive as far as measure of quality. Take database administration, for example, since that's what I know best. The measure of the DBA job in a fixed price model is to ensure that the database is up. Performance improvement or dealing with performance decline is not even in the contract. Also missing is any diagnosis of complex performance or network issues which may involve more than one piece of the architecture puzzle.
As soon as the fixed price DBA determines that "it is not the DB", the client is on their own trying to correct an issue where a DBA could be invaluable in diagnosis and building a plan for corrective action.
5. Fixed pricing estimates are high. They are high on a per hour basis and
To maintain the consistency and image of a franchising system, even a mobile-based franchise, each franchisee must maintain standards of signage. This issue will be addressed generally in the confidential operations manual set forth by the franchisor. However, I found it necessary in my franchising companies to go one step further, I inserted a clause into our franchise agreements stating such. Below please find a clause I inserted into each and every one of our franchisees franchise agreements;3.22 SignageFranchisee must maintain and display standard signs on Franchisee’s car wash truck/unit(s) in accordance with the specificati
As soon as the fixed price DBA determines that "it is not the DB", the client is on their own trying to correct an issue where a DBA could be invaluable in diagnosis and building a plan for corrective action.
5. Fixed pricing estimates are high. They are high on a per hour basis and on an hours spent basis. This is because fixed-price contractors have to back their estimate for a year. You are paying for the risk that they have estimated another account improperly and need to make it up on yours. You are also paying for the risk that you may develop chronic problems—and so they charge for that in advance whether it happens or not.
Once the year is out, the best case scenario is that you have managed to be a "problem account" for them and have actually received some bang for your buck. Now that they know what kind of hours it takes to manage your account, you will receive a new estimate that will be calculated as follows: (yearly hours)*(markup for risk)*(200/hr)/12=(monthly rate). You will most likely not be told this formula but I guarantee that it exists. You can never beat it. You will always pay premium rates, even if you make it through the first year fighting for attention.
6. Fixed pricing never goes down, and it usually goes substantially up after the first year. Whatever the price is, the fixed price contractor always has an hourly rate in mind, like $200/hour. Ask. If you have already hired a fixed rate contractor, ask for a monthly report of how many hours they spend on you. Ask. You will most likely be denied since the hourly rate can be astronomical if they have successfully avoided doing work, but definitely ask.
And what happens if your technical needs are much greater than anticipated? At the end of the year, your fixed rate will be increased based on your hourly usage in the previous year so that you are back at their target profitability level (which they will still not share with you). Since you can never know how many hours they are really spending, you will never know what you are buying.
No matter how good it might seem at the outset, fixed pricing never adds up. You can never truly get the best deal—and you may be putting valuable data at risk. Because with a fixed-price model, if it ain't broke, they won't fix it.
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