"Q: How did they get so spend that money? A: Endless meetings."
Indeed. I've worked on and managed projects where the billable hours for meetings were 2 or 3 times as many as the billable hours for development.
I've also a few times worked on projects like that where as well as the client insisting 3 people from our firm attend each 1hr weekly progress phone conference, there were also multiple representatives from marketing, legal, and network ops on top of 4 or 5 stakeholders and their assistants. The specific project I'm thinking of there involved only about $12k worth of development "work". We billed ~$50k. I have no doubt the cost including internal expenses to the client for that project would have exceeded $250k and may have approached $500k. Interestingly, that client was perfectly happy with the way the project went, and we've worked for them again since then, with largely similar cost overheads.
This is one of the _big_ reasons small startups can out maneuver corporations. The project could have been completed for $12k, if someone was prepared to take a risk and was prepared to accept responsibility for letting the developers run with loose specs and trust them to make decisions when appropriate and ask for guidance when needed. And that's $12k at "outsourced to competent webdev firm" rates, a lean startup with at least one good tech founder would have done it themselves over a couple of weekends or a few weeks worth of evenings. Instead big corporations involve literally dozens of highly paid middle management and somehow approve half million dollar budgets to achieve exactly the same ends, just with accountability and avenues of blame to show for the large portion of that money.
(I'd love to land a similar client with a 40mil budget to "waste" this way though...)
Indeed. I've worked on and managed projects where the billable hours for meetings were 2 or 3 times as many as the billable hours for development.
I've also a few times worked on projects like that where as well as the client insisting 3 people from our firm attend each 1hr weekly progress phone conference, there were also multiple representatives from marketing, legal, and network ops on top of 4 or 5 stakeholders and their assistants. The specific project I'm thinking of there involved only about $12k worth of development "work". We billed ~$50k. I have no doubt the cost including internal expenses to the client for that project would have exceeded $250k and may have approached $500k. Interestingly, that client was perfectly happy with the way the project went, and we've worked for them again since then, with largely similar cost overheads.
This is one of the _big_ reasons small startups can out maneuver corporations. The project could have been completed for $12k, if someone was prepared to take a risk and was prepared to accept responsibility for letting the developers run with loose specs and trust them to make decisions when appropriate and ask for guidance when needed. And that's $12k at "outsourced to competent webdev firm" rates, a lean startup with at least one good tech founder would have done it themselves over a couple of weekends or a few weeks worth of evenings. Instead big corporations involve literally dozens of highly paid middle management and somehow approve half million dollar budgets to achieve exactly the same ends, just with accountability and avenues of blame to show for the large portion of that money.
(I'd love to land a similar client with a 40mil budget to "waste" this way though...)