Why do requirement changes blow up the budget?
Requirement changes blow up the budget when the build is priced before both sides understand the same spec. The pattern is familiar. The spec looks complete at signing. Then real users try the first working version and say, "This is not how we work."
Three things usually follow:
- Every adjustment comes back with an extra quote and a later date, because it was "not in the spec".
- The final cost lands well above the original budget, and the project owner has to explain it to leadership.
- If an SIer or agency sits in the middle, it often absorbs the difference to keep the end client.
The natural reaction is to spend months on the spec. But a spec polished on paper still has gaps that only show up when users see real screens. The problem is not how long the spec is. It is when the build gets priced.
What is a phased software contract?
A phased software contract (多段階契約 in Japanese practice) signs a separate contract for each stage of a project instead of one fixed-price contract for everything. The next stage is quoted once the previous stage has produced results.
This is not one company's invention. The model contract for information systems published by Japan's METI and IPA is built on individual contracts per piece of work. Each piece takes the form of a fixed-deliverable contract (請負) or a services contract (準委任), depending on what it is. In that model, support for writing the requirements definition is treated as a services contract.
The two contract types differ in what the vendor promises and how defects are handled. That difference is covered in who is liable when AI-written code fails.
Who carries spec risk in each phase?
A phased contract does not remove spec risk. It moves the risk to the phase where fixing it is cheap, and it makes clear who carries which part.
| | One fixed-price contract | Phased contract |
|---|---|---|
| When the build is priced | Before the spec is locked | After the spec is locked |
| When spec gaps appear | Mid-project, as change-order disputes | During spec work, fixed on paper |
| How the vendor usually handles risk | Pads the price, or bills changes later | Quotes against the locked spec |
| If you want to stop | Hard, everything is committed | Stop after the first phase and keep the documents |
| Changes after lock-in | Arguments over "is this in scope?" | A written change process |
The last row matters most. Requirements will still change after the spec is locked. The difference is that each change is compared with a document both sides signed, not with whoever remembers the meeting better.
What should an AI project add before the build contract?
An AI project, such as a RAG chatbot that answers from your company's documents, should add a short proof of concept (PoC) before the build contract. AI accuracy cannot be written into a spec in advance. It has to be measured on real data.
VAON proposes measuring on a set of about 50 to 100 real questions, with answers prepared by your business staff. The PoC answers three questions. Is the answer accuracy good enough for real work? How fast are the responses? Roughly what will the infrastructure cost?
A PoC does not guarantee the same numbers in production. Real data is usually larger and messier than the sample. But it gives both sides a number to discuss instead of a promise. How to decide with a PoC is covered in on-premise RAG chatbots: when you need one.
How does VAON split the phases?
VAON splits a project into a spec phase and a build phase, each with its own quote. The first is the Spec Lock Phase (仕様確定フェーズ):
1. Duration: 1 to 2 weeks, 2 to 4 weeks for large projects.
2. Price: fixed and quoted in advance, with no extra charges inside the phase.
3. Led by: a bridge system engineer (BrSE) and a Tech Lead.
4. Deliverables: requirements document, wireframes for every screen, database design, system architecture, and a fixed quote for the build phase.
5. Exit: you can stop after this phase.
During the build, anything out of scope goes through the change process. VAON sends the cost and schedule impact in writing, and starts only after you approve. If you do not approve, the work is not done and not billed. The process is described in how to spot a software vendor without surprise invoices.
One thing this article does not promise: VAON does not say it covers every rework cost. How costs are shared when the spec turns out wrong is set in the contract for each project.
What do SIers and agencies gain?
SIers and agencies sit between the end client and the vendor, so they often take spec risk from both sides. They quote the end client but do not write the code themselves.
A phased contract helps in three ways:
- They can quote the end client phase by phase, in step with the vendor, instead of carrying one fixed total.
- The locked spec becomes the shared reference for all three parties.
- When the end client changes a requirement, the vendor's written change quote can be passed straight through.
If you are considering an AI chatbot under your own brand, see build, resell or OEM: options for SIers and agencies.
When a phased contract is the wrong choice
A phased contract is the wrong choice when splitting costs more than the risk it removes. Three common cases:
- Small, well-defined work. Adding one screen to a running system does not need its own spec phase.
- A product that must be tested on the market quickly. When the goal is to learn from users, short time-and-materials cycles usually fit better.
- Nobody on your side can answer business questions. Spec work needs someone who knows the operation. Without that person, the spec still contains guesses.
VAON also has 15 full-time staff. A project that needs dozens of people at short notice may be beyond what we can take on.
One thing you can do today: open the last software quote you received and look for when the spec is assumed to be locked. If the build price was set before the spec, the risk is sitting on your side.
To work out how your project could be split into phases, book a free 60-minute consultation. Our CEO joins, you need no documents, and there is no commitment.