When outsourcing your project to a remote software development team, the first question you should ask yourself is “which cooperation model should I choose?”
What is an engagement model?
In simple terms, a client engagement model is a structured design or plan which decides the basis of the collaboration between the client and the software development company. The engagement model focuses on the needs, wants, and interests of the client along with ensuring the level of control, flexibility, and responsibility.
Software development is not just a process of analysis, architecture development, design, code writing, and testing. Development starts with choosing a contract type. Most companies rely on long-term cooperation with clients. Ensuring reliable cooperation and flexibility is not an easy task. The most important thing before starting the project is to choose the right business model, specifying the conditions and requirements. Depending on customer requirements and project specifics, there are such models:
Dedicated Team
A dedicated Team is a unique cooperation model that has something in common with both fixed price and T&M approaches. It provides you with a remote team of hand-picked software development professionals, assigned to your project on a long-term basis.
The main purpose of this model is to compensate for the lack of necessary skills and expertise in-house. You can manage the team yourself or engage a dedicated project manager to coordinate the communication process.
This approach has a very straightforward pricing model. A fixed service fee, which depends on the size of the team, is billed monthly. These payments cover members’ salaries and service providers’ fees, including administrative overheads.
Advantages of Hiring a Dedicated Team from TechAbbot
- Expand your development team with diversified experts
- Gain cost benefits with low per-hourly charges
- Instant access to skilled talents
- Full control over the team and its processes
- Your team has a deep understanding of your project and business goals.
- The team is fully dedicated to your project
Time & Material
In this model, the cost of development depends on the no. of resources & time used by the development company on your project. It’s important to note that the client pays for the total time required for the development of a task rather than the time when they chill.
As a customer, it becomes crucial to provide the scope of the project and to oversee it. Clearer is the requirements defined; faster will be the project delivered to you. On the contrary, if your requirements are not precise, then it will consume more time to re-work.
In case, if you fail to provide a precise definition of your requirements, then you have to pay some extra bucks as you’re paying based on a timely basis in which the rates can be defined as on an hourly, daily, or weekly basis.
Unlike the fixed price approach, the time and material model offers more flexibility in terms of both budget and project requirements. In this case, the total cost of the project, as well as its scope, remains unknown until the product is ready. It depends solely on the actual time and effort used to implement it.
Advantages of Hiring Time & Material Resources from TechAbbot
- Kickstart your project quickly
- Better response to dynamic market
- Practical testing of the product with hypotheses
- Gain high-level quality of your product
- Complete transparency over the development process
- The product can be modified as per market sentiments
Fixed Cost
When addressing a software development company, most clients already know how much they are willing or can afford to spend on their product. In this case, the fixed price model seems to be the most fitting.
As the name suggests, this model is a fixed-price contract where the software development team must deliver the project within a predefined sum that is agreed upon by both parties.
This model is cost-effective for clients since they don’t need to pay anything out of the agreed price.
However, this process is tricky for the software development team. It’s because if you come up with any change in the scope while the project is already underway in the development stage, then the software company has to compensate for the excess amount by curtailing their profit margin.
This model is suitable for short-term projects where the requirements and specifications are rigid and predictable.
Advantages of Fixed Price model with TechAbbot
- Fits any idea
- Scheduled deployment & Defined Timeline
- Less Team management required
- Better visibility over the development progress
- Detailed documentation to validate the scope
- Little or no time is spent on interactions as the scope is already fixed
Comparison
| Dedicated Team | Time & Material | Fixed-Price | |
| Size of Project | Large | Medium to large | Small |
| Duration | Long | Average to long | Short and average |
| Client’s Control | High | Medium | Low |
| Pricing | Fixed for each team member per month | Fixed on an hourly, daily, or weekly basis | A fixed price for a project |
| Budget | Highly flexible | Moderately flexible | Fixed |
| Change Requests | Possible during project implementation | Possible during project implementation | Possible after project completion |
| Time Frames | Estimated | Incremental | Predefined |
| Team Scalability | Moderate | High | Low |
| Dedicated Resources | Highly scalable | Not Assigned | Assigned |
| Scope of work | Large | Small to medium | Medium |
| Requirements | Evolving | Evolving | Defined |
| Reports | Daily reports | Daily reports | NO |
| Technology Stack | Flexible | Situational | Pre-planned |
Conclusion
We at TechAbbot have had the experience of working with all their engagement models. Due to this, we consider ourselves competent enough to compare the different engagement frameworks and give you pieces of advice regarding which one to go with. Frankly, we are used to working within the Dedicated Teams model.
However, if a project requires a different approach, the fixed-price agreement isn’t off the table. Let’s say, To kick-off, we can go with a Fixed Price. Later on, if you find the result of our work satisfying and you need to create a fully-fledged and feature-rich app, we can shift to a Time-and-Material & Dedicated Teams type of billing.
Feel free to get in touch with us if you have any questions.