The traditional model
Time & Materials
Undefined scope. Variable price. Pay as you go. For twenty years, this was the standard way to buy software development. It made sense when building was slow and scope was genuinely unknowable.
It is 2026. Why are you still doing this?
Scope
Undefined
We'll figure it out as we go.
Price
Variable
Bills until the budget runs out.
Timeline
Unknown
We'll deliver what we can each sprint.
Guarantee
None
But we'll estimate in story points.
How we got here
Time and materials made sense when building software was slow and expensive. Discovery took months. Requirements changed constantly. Nobody could predict the scope, so nobody could commit to a price. Variable billing was the honest response to genuine uncertainty.
The Agile frameworks formalised this into a process. Sprints. Story points. Backlogs. The client pays for capacity, not outcomes. Scope rolls forward. The bill rolls with it. If the project runs over, that's just how software works.
For twenty years, this was reasonable. Building was slow, so estimation was hard, so commitment was risky, so you billed by the hour. The logic held.
That logic broke in 2025.
What changed
AI-native engineering collapsed the delivery timeline. A single engineer working with AI now delivers in days what used to take teams weeks. Not by cutting corners — by eliminating the coordination overhead that made delivery slow in the first place.
When building is fast, discovery is fast. When discovery is fast, scope can be known. When scope is known, you can commit to a price. The chain of reasoning that justified time and materials — “we can't know the scope, so we can't commit to a price” — no longer holds.
You can now build a working prototype in a day. You can resolve ambiguity before committing, not after. You can show the client working software and ask “is this right?” — and if it's not, change it in hours at negligible cost.
The risk premium that justified variable pricing has collapsed, because the risk has collapsed.
Side by side
| Time & Materials | Fixed Price | |
|---|---|---|
| Scope | Undefined — the backlog is infinite by design | Agreed upfront during discovery |
| Price | Variable — bills until the budget runs out | Fixed — agreed before a line of code is written |
| Timeline | Unknown — measured in sprints, not outcomes | Weeks, not months. Milestones, not sprints. |
| Risk | Transferred to the client | Carried by the delivery team |
| Guarantee | None — you pay for effort, not results | Money back if we don't deliver to spec |
| End point | "When the backlog is empty" (never) | Defined, finite, done |
The real question
If your software provider can't commit to a scope and a price, ask yourself: is it because the work is genuinely unknowable? Or because their process is too slow to discover it?
Variable price, variable scope is not flexibility. It is transferred risk. The client absorbs the uncertainty. The provider bills regardless of outcome. That arrangement made sense when everyone was equally in the dark.
It does not make sense when a working prototype can be delivered in a day.
Ready for a fixed price?
Send us your spec or idea. We'll come back with a clear scope and a single number — no obligation, no timesheets, no surprises.