TIME AND MATERIAL CONTRACT
The time and material contract is one of the most flexible IT outsourcing models that you can use in the project-based engagements. The Project cost directly depends on the efforts involved in delivering the scope of work. Usually, a time estimate is drawn based on man-days efforts and then accordingly based on the criticality and urgency of delivery the resources are added.
HOW DOES THE ‘TIME AND MATERIAL’ OUTSOURCING MODEL WORK?
Our Time and Material model gives you a lot of flexibility and is suits you the best when you have an idea of the end product with fixed requirements or you just want to start with the idea and later shape it during the development phase. Either way, it’s a great choice of engagement where you get a team with various skills that are needed to get the job done.
The cost of the project is estimated based on the time and effort needed to complete it. The estimate is sent for approval before the work is started. The same process is repeated for any new changes or additions introduced in the scope of work. This helps in managing the budget and planning the next development phases.
HOW DOES THE ‘FIXED PRICE’ OURSOURCING MODEL WORK?
Fixed Price Model is employed for customers who have well- defined project requirements and schedules for the solution they want to develop. As per this model, the client pays an agreed fixed price for the corresponding project scope discussed. These project costs are in turn is linked to well-defined deliverables/ milestones. UMANG at the onset of the project bidding process defines these deliverables thus enabling the client to reduce risk by visibly monitoring progress of the project.
KEY POINTS OF THE FIXED PRICE CONTRACTS
#1
At the project planning stage, the System Requirements Specification Document is created. It is a must in time and material contracts. This is the document where all the specifications and functionality carefully described, as well as the cost, development timeline, each milestone, and its deliverables. It serves as a guide for the engineers and as an ultimate argument in any disputes with the development provider.
#2
A short time and material engagement (3-6 months) is the ideal way to try out collaboration before entering any long-term agreements. After you get an understanding of the provider’s work manner, you can go for the Time and Material contract. It would have fewer details about the resources needed to complete each task to save time on the planning stage.
#3
Standard Time and Material contract includes the User Acceptance Testing(UAT) period, usually varies between 15-30 days. It covers the fixing of all the functionality flaws and bugs that have been discovered in the deliverables during that period at no cost. However during this period no new changes or development tasks are carried out.