Q&A · Agencies and outsourcing
Our fixed-price project went over budget again. How do we find out where the money went?
We hear this one from agency owners and delivery directors almost word for word. Here is how we’d start the investigation.
Nythrex team · 10/29/2026
The question
Asked by an agency owner · the way we usually hear it
“We quoted a fixed price, delivered, the client is happy — and we lost money. Again. The timesheets say the team worked roughly what we estimated. The margin says otherwise. Where do I even start looking?”
Short answer
Put every cost of the project in one place, week by week: people’s time, AI, CI and cloud. Then compare it with the scope as it actually shipped — tasks and changes — not as it was quoted. Overruns are rarely one big mistake. They are many small additions nobody priced.
You are not alone, and it gets worse with time
The best-known numbers come from McKinsey and the University of Oxford, who studied more than 5,400 IT projects. Large projects — budgets above $15 million — ran on average 45% over budget and 7% over time, and delivered 56% less value than predicted. Each additional year of schedule increased cost overruns by 15%, and 17% of projects went so badly that the overrun exceeded 200%.
Your projects are smaller, so the percentages won’t transfer directly. The mechanism does: the longer a project runs, the more unpriced work accumulates, and the less anyone remembers why.
Where fixed-price margin usually goes
| Leak | How it shows up | Where to look |
|---|---|---|
| Small requests absorbed without a change order | Tasks created after kickoff that were never in the quote | Tracker, by creation date |
| Rework | Several pull requests and CI runs for the same task | Repository and CI, by task |
| Tooling that grew with the project | AI and CI bills that rose but were never split by client | Provider bills, by repository |
| Environments left running | Cloud cost that continues after delivery | Cloud cost, by project |
| Rounded timesheets | Hours that don’t match any work in the period | Time next to tasks and changes |
What we’d do before the next quote
- 1
Freeze the quoted scope
Write the quote down as a list of tasks. Everything added later is visibly different. - 2
Label additions as change requests
Even the ones you decide not to bill. You can’t negotiate scope you never counted. - 3
Look weekly, not at the end
A weekly cost per project shows drift while there is still time to talk to the client. - 4
Find the expensive changes
Cost per shipped change shows which parts of the work — integrations, a fragile module, one environment — ate the margin. - 5
Quote from actuals
The next estimate starts from what similar work really cost, including AI, CI and cloud, not from memory.
Where Nythrex helps — and where it doesn’t
What it does
Brings the cost of a project into one view: tasks from Jira, Trello, Linear or Azure DevOps, pull requests, CI, AI from Claude Code, Codex and GitHub Copilot, and cloud from Azure or Google Cloud, with an optional estimate of people’s time. Views by project, team and period; every figure shows its basis.What it doesn’t
It doesn’t replace your invoicing or contract tools, and it doesn’t write your quotes. Cloud is counted at project level, not split across individual changes.
Frequently asked questions
Why do fixed-price software projects go over budget?
Usually through many small, unpriced additions rather than one big mistake: client requests absorbed without change orders, rework, tooling costs that grew but were never split by client, environments left running and rounded timesheets. Longer projects accumulate more of them.
How often do IT projects run over budget?
In McKinsey and Oxford’s study of more than 5,400 IT projects, large projects ran on average 45% over budget and 7% over time, and each extra year of schedule increased overruns by 15%.
How do I find where a project’s margin went?
Put people’s time, AI, CI and cloud costs for the project in one place by week, compare them with the scope as shipped, and look at the cost of individual changes to find the expensive parts.
Read next
- AI made your team faster. Is the client project more profitable?Agencies and software outsourcing firms are adopting AI faster than they can price it. Before you choose hourly, fixed or value-based pricing, you need one number most agencies do not have: what each client project really costs.Read
- The cloud bill went up. Which project did it?Managing cloud spend is the top cloud challenge for 85% of organizations, and estimated waste rose for the first time in five years. For a team without a FinOps department, the first question is simple and hard: which project caused the increase?Read
- How Nythrex works: from AI session to productionHow Nythrex links the task, AI session, commit, pull request, CI run, deployment and cloud into one unit of work with its own cost and the basis for every figure.Read
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