Resource based model for “Freedom of Scope Change”
In recent years, lot of customers prefer to go with resource based model where they hire the developers and assign tasks directly with one (POC) point of contact for the communication. Being in the industry for some years, we have seen wide spectrum of customers and served them as they expected from us. We ensure that we only take projects where we are confident of fulfilling our client’s expectations or we respectfully turn down projects that are being set up for failure. Having said that, setting up the engagement as fixed bid or resource based could make a difference in the success.
As much as we prefer to focus on design and technology, cost also matters in facilitating the decision making process. In a start-up culture, sometimes cost plays a vital role in the software development discussions. Since the software development is a custom made solution, cost of the same varies from company to company and client to client. It is recommended to remain transparent and honest about how you arrive the cost and always aim to provide a fair pricing for the services provide. However, pricing of a software development project is an inexact science, even if the engagement is fixed or resource based model.
Due to lack of knowledge in the software industry, some customers consider custom software development as a commodity which is actually not. With this approach, many of people have been burnt their money/time without having any output in return. All this happen because of their fixed bid approach and finding a vendor that can deliver what you need for the lowest price. This works, but only if the requirement is simple and less customization needed. Unfortunately most of the software development projects are not standard. Business should have some USP from the other competitor and standard ones will not make any impact in the market and so poor growth.
In fact, there are situations where we need to estimate based on some assumptions and interpretations that we have from the required document that shared by client. However, we consider all the possibilities and make our clients understand the scenario of scope creeps and educate them for the better execution. Furthermore, there is a good amount of time needed from both the parties to come up with a fixed scope and negotiation on the cost. Often time, client doesn’t know what they exactly need in each milestone of the project. They might have approximate idea but it won’t work in that way. Here we come with the resource based mode which suits all the requirements from the business analysis to design of website pages, development and deployment of the application. There is no wasted time\effort on determining the scope as the developer/team is only working on your project and brainstorming various possibilities of making your project a success.
After bad experience with other companies, some clients are asked upfront to go with resource based model. They are very conscious about the quality rather than just cost and we are always glad if they know the benefits of resource based model. A concern might have for all the resource based model is that open-ended contract with no checks or limitations to the budget. We understand the pain points and always try to keep a trust factor in all the engagements instead of just doing business. We review the requirement in the earlier stage and make sure that it doesn’t go beyond certain limits. Also, we suggest to prioritise features to hit the business needs quickly and focus on returns.
To conclude, resource based model works in such a way that we split the entire project into different phases. It could be business analysis, design of pages, front-end and backend development, deployment etc for normal projects. We put deliverables in each phase deploying required resources to reduce the ambiguity and keep an agreement intending mutual trust in the engagement. This will lower the risk of a failed fixed bid project and give you a space for complete customization reducing the ambiguity & assumptions.