An even number over uneven work

I have read a number of quotes this year where a new line has appeared. It says tokens, or licences, or AI-native setup, and it sits on top of all the usual items as a flat monthly cost. Roles and hours and duration as before, plus this line.

The buyer receiving it is in an uncomfortable position. The hourly rate they can judge, they have been doing that for twenty years. For the new line there is no reference point.

In one of those cases the supplier's own email contained two figures. The even monthly amount, and a considerably higher number that applied during an intensive phase in the middle of the project. Both were there, in the same email, honestly written out. Nobody had added them together.

The buyer had received a monthly figure where she needed a project figure. And the difference between the two was not marginal but closer to double.

Four things that do not belong together

What makes that line hard to read is that four entirely different costs have been collapsed into it.

There are tools. The developers' licences and subscriptions, meaning the supplier's own working equipment.

There is one-off work. The migration, the first round of translations, the verification and the reruns. A hump that ends once it is done.

There are phase-bound efforts. Overnight runs ahead of a launch, regression sweeps, rollout checks. They exist only during a certain part of the project and then never again.

And there is genuinely ongoing operation. Quality control of new content, translation of whatever gets added. The thin line that continues after launch.

Only the last one justifies a fixed monthly cost. And it is almost always the smallest of the four.

What the smoothing does

The real curve in a project like this looks like two humps with a thin line between them. A hump when the migration runs, a larger one during the intensive phase, and almost nothing in between.

Laying an even amount across that curve gets two things wrong at once. It is too high most months, so the buyer pays for capacity that goes unused. And it is too low during exactly the weeks when everything depends on it being enough.

The supplier in that case wrote out themselves that the budget would not be sufficient during the intensive phase. That is an honest note. But it sits in the same document as the even figure, as though the two were not about the same money.

Why it is rarely intentional

I rarely think the smoothing is a sales tactic. It is more often the only way to answer a question that was asked wrong.

The buyer asks what it costs per month, because that is how they are used to buying maintenance. The supplier answers per month, because that was the question. Neither of them has done anything odd. And yet there is now a figure on paper that describes no actual sequence of events.

It is also a young market. The method is new to the supplier too, the price rests on a couple of projects' experience rather than on a worked-through calculation, and the person who has to explain the figure in the meeting is rarely the person who produced it.

The question that sorts it

Really only one question is needed to move forward, and it is not a technical one.

Ask for the cost split into one-off work, phase-bound effort and ongoing operation. And ask for the total across the whole project rather than per month, with the number of months per phase.

Any buyer can ask that. It requires no knowledge of models or tokens. And the answer says something the price tag never does.

If the breakdown comes back with named steps and figures that add up, you have a supplier who has done the arithmetic. If it comes back as the same even number in three rows instead of one, you know something more useful than what it costs.

What this is really about

You cannot judge the method. Nor should you have to.

But you can judge whether it can be accounted for. And whoever can account for how the cost is distributed across a project is, in practice, the same person who has thought through how the work will be carried out.

That is why this question is worth asking first. Not to catch anyone out, but because the answer to it determines how much the other answers are worth.

See also: An agent hour is not a unit (series 55) and The questions you will be asked in eighteen months (series 58).