Professional services
The most common strategies to bill customers for services are Turnkey and Time and Material. Turnkey means all services have a set cost that can only adjust if services are requested outside of agreed upon scope of work. Typically, modifications to a Turnkey engagement require a separate request for change that the customer must accept prior to including additional billing.
Turnkey services put the risk of losing profitability on the service provider, because cost does not adjust regardless the amount of labor required to meet the scope of work. This means the service provider has an opportunity to complete tasks under proposed time equaling additional profit. This could also backfire when services exceed the cost of labor. This is why it is absolutely critical to define an achievable scope of work for proposed services with some additional padding hours used for unforeseen incidents.
Customers tend to lean towards Turnkey services based on the ability to plan for expected...
