Not every project has already pre-made specification and going for a fixed price model is dangerous for the client and the service provider. The right model for any project where both specifications and time competition is not clear is – Time and Material Price Model. The model revolves around the idea of pay per hour model and is based on the payments according to work done. For projects, those are complex and specifications are not clear, this type of model fits best and returns are always high and no risk of failures. The most benefited projects are the complex projects or projects with a very high budget.
Spending on the right resources is important and creates a step by step improvement throughout the project. Great Communication is maintained with the client so that they can improve the whole process and change requirements whenever necessary. Also, our team provides periodic reports on time and resource spent so that the client can alter the resources whenever necessary. The control is always in the hand of the client and we take care of deliverables even when they are delayed, we tend to inform the client way ahead of the time.
All the transactions are transparent and all information is presented in a well-structured way and creates a strong connection between the team and the client. The client also needs to pay for the work that has been done. Furthermore, the client can either redirect resources to other critical processes or choose to cut down resources to a particular part of the project that needs necessary attention.
Fixed price model is preferable for the small or medium scope short-term projects with clear and well-documented requirements. It involves precise scope and project specifics, predefined delivery period, and fixed budget.
With Fixed Price Model, projects can flourish and even move towards excellence. The dynamic of this model works best for projects that are on a tight budget and have clear requirements at the start of the project.
At eSparkBiz, we always believe in innovation and revising our pricing model to incorporate maximum business type into our service. To overcome the current industry problems, our R&D team works with industry experts to bring changes in both the pricing model and the different processes.
If you’re looking for a model with a bit of extra flair, the Risk-Reward Pricing model would be the best choice for you. This model contains a flat-rate and holds additional payments until your partner achieves specific objectives. However, here the client and service providers usually share funding the development of new products, allowing your partner a share in the rewards for a defined period of time.
The Risk-Reward Model encourages your partners to develop ideas that improve your business by sharing the financial risk between both parties, and, according to Gartner, assigning responsibilities to the partner mitigates some risks associated with new processes, technology or models. The result of your partner’s work may be difficult to measure, so you’ll need to be prepared to enjoy the upsides and whether the downsides.
Dedicated development team lets you gain complete control over project management and only get your IT company to hire a team of dedicated developers, and provide extra development resources if needed. The team members report only to you and follow your corporate culture and policies – they become a part of your company and will work on achieving your objectives. You manage the project development team of dedicated programmers on a daily basis via regular Scrum meetings or virtual PM tools. Also, you are tasked with more technical aspects, apart from people management that includes selecting development methodologies, platforms, project tracking tools.
This model is a good fit for agile development, as it’s the most scalable model in software development outsourcing. If you don’t have a strong in-house project manager, your outsourcing company will provide you with a dedicated PM. The IT expert will track the project progress and help you with the offset and team management.