Before the commencement of any project, a cost model is selected for the project development process. Currently, software or projects are developed on the basis of three main models i.e. Fixed Cost Model, Hourly based model also known as Time and Material model and Dedicated Team Model.
Fixed Cost Model:
Fixed Cost model has only one requirement: it is basically used in projects with definite results. When it is certain about what should be done, the advantages of the cost model increases, the workload is evaluated correctly hence the project get accomplished on time. This cost model is often suitable for small scale projects.
The Fixed Cost Model is perfect for recognizable and well-thought projects of low to medium complications. The model demands well-developed technical prerequisites in form of specification documents. This means that a client has to provide all the detailed information, scope and specification of the project to the company. This notifies about all the project-related risks beforehand. During the implementation, the projects are neither extended nor changed. Some cooperation from the client is required in the fixed model in the form of relevant and timely assessment and feedbacks.
The major benefit of the model is low uncertainty and predictability of the project results, which, nonetheless, is based on the quantity and quality of efforts contributed to determining the requirements of the project. This model saves the client from any sudden or unexpected costs, involves minimum to no risks, time-saving and cost-effective development process.
Hire Dedicated Model:
The Dedicated model is for projects with a longer term and where project specifications can be customized during implementation. This project is best for the accomplishment of medium and large scale projects of any complexity. The majority of the complex software projects intend to deliver some kind of solution to a business-related problem. This model lets the software developer and the client figure out the solution together.
Both participants discuss features and potential scope of the project. The experts begin formulating the specification documents that evaluate the monthly price and staff requirements. When these keynote terms are collaboratively agreed, an agreement is put together for signing, involving issues such as licensing and intellectual property, confidentiality, warranty extent, the period of maintenance and support, etc. Meanwhile, the organization assembles a dedicated project team. In case if the workload decreases, both the participants can agree to change or terminate the agreement. And if the workload increases, extra staff can be added to the dedicated team.
The Dedicated Team Model gives ample of space to assemble the best team for your project with utter devotion to your business requirements. The dedicated team involves an experienced supervisor to ensure the most productive workflow. The standard cost for dedicated resources is minimum than for your local developers; this means significantly fewer expenses over the long haul.
Hourly Based Model:
Apt for clients who want to be in the supervision of the project development process. In Hourly Based Model, the client is charged in accordance with the utilized resources and the time spent when working on the project.
It is mostly utilized for the Mobile App Development projects, where scope, specification and implementation schemes cannot be completely characterized in advance. The development work is invoiced each month on a collaboratively decided and previously discussed hour rate/ person. The Hourly Based Model between any client and organization can last from 3 months to several years. This price model is for projects that are longer in duration and where project requirements can be revised during implementation.
The usual scenario involves identifying an issue, working out specifications, visual mapping, architectural design, documentation, coding, QA testing, release, and support. A close collaboration is required for the administration of complex projects between the developer and the client.
This is advantageous for the clients as they are not restricted by any fixed budget. Also if the client comes up with any ideas for his software then the dedicated developers won’t have any issue in making changes even after the project has been initiated.