If you have decided to develop software without having your development team, it is clear you will need a contractor. Another thing is not clear: how to pay for this job? Which cooperation model to choose? What will be rational for you? Let us try to figure this out.
Popular Cooperation Models
To make it easier to understand this, we have prepared a list of cooperation models from which you will find out their advantages and disadvantages, and determine the best option for your business.
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Dedicated Team
This cooperation model can provide you with a professional dedicated development team from Ukraine that will work on software solutions for your project. This model allows you to hire a team, taking into account the level of professionalism of each participant and the project budget. They use the monthly salary of all team members, as well as additional administrative costs to define the price.
The advantage of a dedicated team model is that the developers are at your complete disposal: you can set tasks to them, apply the individual development methodology, and even the corporate culture. For instance, you can hire a dedicated development team that will work in your office. The customer can exercise full control and management of the team, as well as regulate the workload.
However, there are also some cons. If working with insufficient instructions, a remote team can create a project based on its own preferences. However, such experiments can bring a new vision to the project.
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Time and Material Project
This is a model in which the price is formed from the time spent by the team and materials for the development of the project. It is most often used when it is problematic to determine the exact cost of the finished product.
Pros:
- The customer is able to quickly change the plan or requirements for the final product.
- T&M works well with modern agile methodologies like Scrum.
- The opportunity to track the result at all stages, as well as monitor the progress and communicate with the team.
Cons:
- You cannot always define the budget in advance. It depends on the accuracy of given instructions or their changes during the work.
- With this approach, developers may have to spend a lot of time communicating with the customer.
T&M is suitable for small medium-term projects that are carried out by a small team.
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Fixed Price
It is a model in which a fixed price for specific services is already set. Unlike other cooperation models, fixed price is best suited for short-term projects. For example, when a client wants to work with a new partner and launches a small pilot project that will take a month or two to develop. However, the method is also suitable for long-term projects.
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Agile Value
Agile value is a modern, flexible pricing model that is based on the expenditures of the company, the client’s price and the prices of competitors. It provides close cooperation between the customer and the executing team. The work is usually divided into sprints that are completed in a short time. Agile value is suitable for both short- and long-term projects because important tasks are based on the actual needs of a customer.
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Pay As You Go & Its Financial Benefits
Pay As You Go is a model in which payment is made for a specific service. In the IT sphere, some services that provide cloud storage use PAYG. If a client uses 1TB of space per month, then it will be necessary to pay only for 1TB. Therefore, the method is only suitable for those companies that offer a paid service and not application development services or marketing campaign implementation.
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Hourly Rate
Hourly rate is another payment method that is suitable for companies engaged in small and short-term projects that can be completed by one specialist. For instance, UX/UI design studios, app development, copywriting, and so on. This model is characterized by the following cooperation algorithm: a customer gives a specific task, sets a deadline, and a contractor determines how many hours it will take to complete the project from which the price of the finished product is calculated.
Conclusion
When choosing a model of cooperation, you need to consider the complexity of the project, the time to complete it, the number of specialists involved, and their level of expertise. Then, it will be possible to get an expected result for an appropriate price.