Fixed bid, T&M, FTE models, which one is best for a customer

Fixed bid, T&M and FTE are some of the popular pricing models used in IT application development or software development. Each model has its own plus or minuses. Each models would fit under different situations but from a customer point of view which is the best pricing model?

While each of these models fit perfectly under different situations & brings its own advantages & disadvantages, it is the customer who needs to take a call on which pricing model he prefers.

Software development companies would normally suggest the customer to go with T&M or FTE model because they will be in a safer zone as it brings more flexibility, ease, and no commitment/risk for them and a high potential for over billing.

Note, both these models are not In Paper tied into any final delivery. Which means as a customer you will pay & you don’t know what you will get in return. This may end up in a situation where your project may never get completed as per your time frame & you may be taken for a ride.

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