ServiceNow Consulting Costs: Fixed-Fee vs Time-and-Materials, and Which One Actually Protects Your Budget
A finance director at a logistics group in Rotterdam called me in February. Their ServiceNow ITSM rollout had been running for eleven months on a time-and-materials contract with one of the big consultancies. The original estimate was 420 billable days. They had just signed off invoice number thirty-four, and the running total was 710 days. Nothing was live yet. The project manager kept using the phrase "complexity emerged during discovery," which is consultant Esperanto for "we didn't scope it and now we're charging you to fix our scoping." She asked me one question. "Would a fixed-fee contract have stopped this?" The honest answer is that it would have stopped most of it, and the parts it would not have stopped would at least have been someone else's problem. That is the whole argument for how ServiceNow consulting costs should be structured in a mid-market engagement. Not that fixed-fee is cheaper on paper, because sometimes it is not. The point is that fixed-fee shifts the scope risk off your P&L and onto the vendor's, and that is the risk that actually blows budgets.
