| There are several popular
models in which Software Development companies
can be engaged. At mostly, its not about which
model is good, its about which model is appropriate
for the work to be performed. At BrickRed, we
strive to consult our Clients not only in software
development but also in the most appropriate
engagement models keeping in mind the key goals
of the Client. Before we compare the various
models, let us briefly discuss them:
Fixed
Bid
In a fixed bid engagement, a fixed set of requirements
are documented by the Client and the development
company provides a fixed quote for the work
to be done. A timeline is decided with specific
milestones & each milestone is linked to
some percentage of the payment. The word ‘fixed’
is crucial here – typically the vendor
would not be flexible in wavy requirements and
similarly, the Client would not be flexible
in changing commercials.
Time
& Materials
In a Time & Materials engagement, the Client
passes-on ad-hoc tasks to the development company.
The work is taken up as per the priority decided
by the Client, and the Client is invoiced for
the number of hours spent on their work. The
total work or the total invoice amount is not
known prior to the commencement of the engagement.
Offshore
Development Center (ODC)
In an ODC (or Dedicated Team model), specific
resources at the development company are dedicatedly
assigned to the Client. Work can be end-to-end
software development from scratch, or can be
ad-hoc tasks to assist Client’s internal
team. However, the key is that the Client retains
them on a medium/ long term basis in order to
retain the knowledge the resources have gained
during the course of the engagement.
Presented below is a quick comparison table:
| Parameter
|
Fixed
Bid |
Time
& Materials |
Offshore
Development Center(ODC) |
| Priority of Work |
Fixed |
Flexible |
Flexible |
Flexibility
of Requirements Specs’
|
Fixed |
Flexible |
Flexible |
| Resource Control |
None |
Full |
Full |
| Visibility of Methodology |
None |
Partial |
Full |
| Team & work Management |
Vendor |
Client |
Vendor |
Same Team Retention
|
Not Possible |
Possible |
Guaranteed |
| Cost Control |
Fixed; controlled |
Unestimated; Timesheet- controlled
|
Estimated & controlled |
| Basis of Charging |
%payment for each milestone |
Hourly Rates, payable monthly |
Monthly rates, payable monthly |
| Change Management |
Difficult; premium charged |
Not an issue |
Not an issue |
| Suitability |
Suitable for well-defined components
or modules.
Unsuitable for building version 1 of
software products |
Suitable for ad-hoc tasks or where the
work volume cannot be estimated early on.
For example, bug-fixing for a stable product,
graphic design for a new UI |
Suitable for all work where ‘knowledge
retention helps’, and where flexibility
in work prioritization is needed. For example,
building commercial software from scratch |
Short term savings
|
Yes |
Yes |
Yes |
Long term benefits
|
No |
No |
Yes |
To find out more about our offrerings,
e-mail us at contact@brickred.com.
|
