Dedicated Team vs Fixed price vs Time and Material: Which Engagement Model to Choose?

Dedicated Team vs Fixed price vs Time and Material: Which Engagement Model to Choose?

Often professionals get confused in finalizing the best engagement model for their project. It is of utmost critical to go with the best one. Some of you might not give much priority to it but, I would suggest not ignoring the same.

Are you about to justify the engagement model for your upcoming project? Then this place is for you as I’m going to guide you on which engaging model are the right fit for you.

Guidance on engagement model

However, first, we know what the engagement model is?

Engagement model – A Brief Introduction

The client engagement model is like a structured design or a plan. It decides the basis of the client and software development company collaboration.

There are numerous kinds of engagement models. It mainly aims at wants, needs and customer interest by ensuring flexibility and controlling level.

Fixed price model, time & material model and dedicated team are the three most desired engagement models.

An engagement model image

Fixed Price Model:

There is a fixed-price contract in which the development team has to deliver the project within the predefined sum. Both parties agree on it. It is a cost-effective model for clients because they don’t have to pay anything out of the agreed price.

Working of fixed price model:

This kind of model is quite beneficial for the client. They don’t have to pay any additional charge. However, the process is difficult for the team.

The profit margin decreases when the client decides to make any changes in the project of the development stage. When there is a change in the scope, the situation becomes much more difficult.

When to choose a fixed price model?

  • For the short term project when it is limited
  • To test the developer's skills before hiring them permanently??
  • When there is a need for collaboration between client and in house team.
  • For the MVP products

Advantage:

  • The model offers good predictability. Before the start, you can easily determine the expenses of 1 to 3 months.
  • The project is simple to deal with because it is divided into individual tasks
  • The overall price doesn’t exceed the budget
  • MVPs friendly

Disadvantage:

  • Flexibility is not applicable here.
  • The change in the scope would also bring changes in the total cost.
  • Face to face meeting and discussion is mandatory in such model before starting of the project.

Time and Material:

The cost in such a model is proportional to the number of resources and time need by the company. Here the client will only pay for the total time required for the development of the task. It is crucial to provide the scope of the project delivered to you.

When to use time and material?

  • When the flexibility is on priority
  • Long term project when the requirements are always changing
  • Complex project execution that needs several iterations
  • When there is a need for transparency between client and team

Advantage:

  • This model is flexible as you can make changes
  • Low risk is a part of this model
  • You can proceed with each iteration until you have a solid MVP rather than planning everything.

?Disadvantage:

  • Low budget control is there in this model
  • Full-fledged needs from your side that includes spending much time in the communication.
  • There could be a delay in the release date if you suggest numerous changes.

Dedicated Team?

In this engagement model, you can retail the project management control. It is because this model eliminates the drawback of both systems.The service provider will take care of the recruitment, infrastructure and administrative support for the team. The dedicated team is responsible to monitor the performance.

Due to its flexibility and scalability, it is best suited for the offshore software development company.

?When to choose a dedicated team model?

  • When there is a long term requirement of IT project
  • Adding more resources to set up an off-site team
  • When you want to access the knowledge sharing

?Advantage:

  • It is one of the most flexible models. You can change the scope of the project at any stage.
  • A real-time check on the progress is also possible in this model.
  • It is budget-friendly because the service provider takes care of infrastructure, administrative support and resources as well.

Disadvantage:

  • There should be a task allocation for every member of the team
  • The real-time check on the progress is possible in this model
  • Communication, software development and negotiation are some of the aspects in which you need to invest more time.

Which won the race?

In my opinion, the dedicated team model is the best engagement model. The reasons behind my words are as follows.

  • Pass around legal boundaries: The members of your dedicated team are serving different technical needs. With a dedicated team model, you can keep the legal issues at the bay. It includes law of the land, company registration and taxes.?
  • Save time and money: Dedicated engagement models also offer the chance to save time and money. The outsourcing vendor provides most of the services that’s why it is the best cost-effective method.?
  • Staff management: There will be a contractual agreement between the dedicated team and the outsourcing vendor. So the outsourcing vendor will look after the entire HR-related issues.
  • Accountability: The outsourcing company keeps tracking the team’s performance. It ensures that entire team members are working under the company’s goal.??

Our Final Words:

Here I end my words and hope you get a clear roadmap for choosing the right model. The correct model is crucial for the client and for the company as well. If you have a short-term project, then I would recommend a fixed price model. If the cost doesn’t matter and there could be a change in the scope, then Time & material model is your cup of tea.

However, the dedicated model is one of my favourite models for those who have long term projects. I always recommend it to my clients when they avail of app development services.

Now I want to know your opinion. Which one is your favourite model???

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