Why Fixed Scope and Fixed Price Projects Cannot Work Blog

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Introduction

In software development, the concept of a fixed scope, fixed price project is a comforting illusion. It promises certainty in a field defined by constant change and unpredictability. The truth is simple: requirements shift, user needs evolve, and technology moves faster than any upfront plan can account for. Trying to lock everything down at the start almost always leads to frustration, misalignment, and ultimately—failed projects.

This article explains why fixed scope is a flawed approach to software architecture, especially when it comes to non-functional requirements (NFRs). These critical aspects—performance, security, reliability, observability—are too often treated as vague aspirations or left as afterthoughts. Ignoring them upfront undermines system quality and leads to expensive rework, missed expectations, and fragile systems.

The Illusion of Fixed Scope

Fixed scope assumes we can perfectly define all requirements upfront, freeze them in place, and simply “build to spec.” But software development doesn’t work that way. Requirements are fluid. They change with user feedback, shifting business priorities, new competitors, and emerging technologies. Pretending that software is a one-time transaction—like building a chair—is a recipe for disappointment.

The False Comfort of Certainty

On paper, a fixed-price contract looks straightforward:

- The buyer agrees to pay a a fixed amount of money.

- The vendor delivers a product matching the defined scope.

The price—say $100,000—is clear. But what about the scope? Consider this simple requirement:

“As a workspace owner, I can set administrative privileges for workspace members to control who can see and edit specific data.”

Sounds precise, right? Yet every stakeholder reading it imagines something slightly different. What exactly are the edge cases? How polished is the UI? What about error handling? Without the final code, every requirement is just an approximation of reality.

The truth is uncomfortable: the only perfectly accurate definition of software is the software itself. But if we already had the software, we wouldn’t need to build it in the first place.

Why specifications are just models

A specification is not reality—it is a model of reality. Like a map, it is helpful but imperfect. A map that tried to represent every single detail of the terrain would have to be as big and complex as the terrain itself. Likewise, a specification that truly removed all ambiguity would be as long, intricate, and time-consuming to produce as the actual source code of the working product itself.

Maps are useful because they simplify complexity. They highlight key features. Yet in software projects, we routinely forget this limitation. We expect a scope document to perfectly represent the final product, even though it is just an approximation. This gap between expectation and reality fuels misunderstandings, misaligned visions, and ultimately, project failure.

The Hidden conflict in fixed-price deals

Maps are neutral. Scope is not. In a fixed-price deal, scope becomes a battlefield. The buyer and vendor agree on the price. But now:

- The vendor is incentivized to deliver the minimum required to meet the contract, often interpreting the scope as narrowly as possible to maximize profit.

- The buyer naturally pushes for more value, trying to extract as much functionality as possible for the agreed price, often pushing for more features assuming that more functionality equates to higher value.

This structure ensures misaligned incentives from day one. Instead of collaborating toward a shared goal, both sides quietly pull in opposite directions.

When incentives are misaligned

When incentives are misaligned, collaboration suffers. The relationship becomes transactional, not cooperative. Fixed-price, fixed-scope contracts create a situation where: The vendor optimizes for profitability by doing less. The buyer pushes for more features, expecting higher value for the same cost. Neither side is wrong—but this structure guarantees tension, mistrust, and poor teamwork. And that’s why fixed-price, fixed-scope projects rarely succeed.

The Solution: Optimise for flexibility

The only way to avoid the pitfalls of fixed scope is to embrace flexibility. Treat specifications as living documents that evolve alongside the project. This means: that you can adapt requirements as new information emerges, prioritize features based on user feedback, and foster a culture of collaboration and continuous improvement.

By treating specifications as maps, not blueprints, you can navigate the complexities of software development more effectively. This approach allows for better alignment between stakeholders, reduces misunderstandings, and ultimately leads to higher quality software that meets real user needs.

You can also set success metrics by specifying not software features but key metrics instead, defining what success looks like in measurable terms. This shift in focus helps ensure that all stakeholders are aligned around shared goals and can adapt more easily to changing circumstances.

You can describe specific user stories and define narrow use examples in a binary and testable way - making completion of success stories as defining the product done - leaving the feature and implementation details flexible. You can refine and expand on those stories as understanding of the product, use case scenarios and edge cases increases with every iteration of the product.