How do you manage when Client Ask you to reduce Cost?
Shoumik KahaliTechnical Manager| Yash TechnologiesIndore, M.P., India
Some times a Client ask you to reduce the cost of development without reducing the Features requested.
And you have the pressure of not loosing this client due to Competition or this might be new client and you might be looking for a way to enter into business with this client(so that you can get more business later)
In such situation though there is a monetory loss in current project but we can makeup with some other benefits...
For example we had a product that was doing good but we never sold it to a organization having IBM Infrastructure...
Once we got a client but they had some budget constraint...but they had the infrastructure we were looking for... We did offered them a package where we implemented some other projects for them and reduced the price for our product...
The benefit we got was we now had a reference for our product on IBM Infrastructure and that helped us in making sales to other client(who wanted a reference that our product will work in their environment)
So what is your opinion on this topic? Saving Changes...
E Travis PMPGlobal Program Manager| PonderworksMelrose, Ma, United States
I have seen this situation come up many times. It seems to me that more often than not, the contractor ends up with the short end if the stick. The main reason for this is the contractor does not appreciate what they want out of the deal.
In your case, Shoumik, the decision was made that you wanted a particular reference. Rather than considering that you lost money on the project, what you really did is buy a reference. When I have been faced with similar situations, I have written into the contract that the lieu of a larger payment, the customer is obligated to act as a reference assuming the project is completed successfully. I further stipulate the period of time I expect them to act this way and the number of times in a given period (e.g.. no more than twice a month) they will be asked to provide a positive reference.
In this way, the concession I am making is formalised in the contract and everyone gets to "win" something. I get some money to defray costs and a positive reference. The client, of course, gets a discounted cost. In the parlance of business operations, I have purchased "good will" assuming I do my job properly. Saving Changes...
