Here is an interesting situation we have been put in. We developed a proposal that includes deliverables, work packages and their estimates, risks etc. Also we planned some contingency for risky situations , like API integration may take more time than needed, application may not work on some specific hardware and this will require additional time for fixes, etc.
However customer insists on handling all the risks by their side. This sounds very good for FP project and let us share responsibility about the risks. On the other hand it allows customer to keep the project budget at the minimum level. If we accept the order on these terms, what is the best way to manage these risks?
That sounds like a disaster. I think that set up would be a set up for a bunch of finger pointing and blame down the line. If they want to have influence over the costs, do T&M or cost plus. In fact, that's pretty much what this is or will be except without the finger pointing and lawsuits.
I don't think this is a disaster. We have done various projects on such conditions and it can work. Essential things are:
- Ensure that you are partners in the project (which is generally a good idea when it is a real project) and not competitors.
- Ensure you have explicitly defined what risks are moved over to the customer side as out-of-scope.
- Ensure you have some kind of time restriction: even when you deliver, the customer might not be able to go live due to occurrence of the out-of-scope. Allow the customer a reasonable amount of time to fix it and after that have the project automatically finish even when acceptance criteria are not fully met.
If the client wants to take all the risks, he must manage them, too. If he is not skilled in risk management for software projects, that would be a problem for you because you can't do it yourself as in a normal project and the success of the project depends on it.