When working with a software development partner: Which Engagement Model should you choose?
We understand that when you are looking for a software development partner you want one that understands your business needs and can contribute to the problem-solving process for your project.
With consumers forced to change lifestyle and shopping habits due to the impact of the pandemic, now, even more so, it’s a priority for businesses to keep costs low. At Strides Empower — we pride ourselves on offering competitive rates without having to sacrifice the quality.
We understand that finding the right partnership is key, our prime focus is on understanding our customers’ requirements. For us, what guarantees the beginning of an effective two-way business relationship is using the right engagement model that works for both parties.
We have detailed below the most common engagement models to enable you to choose the one that best suits your business requirements.
What is an engagement model?
The engagement model serves as a basis for client-software partner relationships. It’s a framework chosen to manage our customers that serves as a basis of future collaboration between our clients and us that ensures a level of control, responsibility and flexibility.
As we know, customers’ requirements are all different as are their projects — And there is no standard way of collaborating. So, selecting the most beneficial engagement model aims to align goals around a common outcome and the best suitable pricing model.
Which is the ‘best’ engagement model to choose can be based on various factors such as:
- The maturity level and the track record of success of the Software Development Partner
- The customer’s previous experiences with other software providers and models
- The customer’s individual requirements and budget
Our most popular engagement models are: Time and Material, Dedicated Team, and Fixed Price.
Time & Material
Time & Material is a cost-effective model where the amount of budget spent corresponds to the amount of work delivered and the time spent on your project.
We will agree upon an hourly, daily or weekly rate for the allocated to the project resources. This engagement model is often preferred because it offers flexibility for customers to change requirements at short notice, has the ability to balance project resources and spread the workload.
We ensure that all projects delivered through the Time & Material model are accompanied by an experienced and skilled project manager — this ensures that the quality is properly managed throughout your project. Progress and deadlines are regularly reviewed so there is a key focus on getting the work done on-time and within the agreed budget.
Choosing the Time and Material model usually minimises the biggest risks of using a software partner to outsource your project as you have full control over the scope and the budget spending. With Time and Material, bugs are highlighted and rectified in the early stages of the project, the cost is thoroughly estimated with the sequence of iterations due to Agile methodology used on the project. In addition, we can ensure that the project meets market needs with our clients’ validation before it’s too late to change anything!
We are also able to work with you on a payment schedule to help you manage your cash-flow requirements. So with regards to the total project cost, you have more control than you might think.
Choose Time & Material Engagement Model when:
- You wish to test out a new software provider to build trust;
- You have a list of requirements that are estimated to take less than 1 month;
- You don’t have a defined list of requirements that can be estimated and a fixed-price engagement model can’t be used;
- You have a defined scope and requirements but you want to have more freedom — perhaps as your development needs may vary over time;
- When developing medium-term or long-term projects with the possibility of changing requirements;
Dedicated Team (Team Extension)
A project engagement model with a Dedicated Team means an extension of your own team — using us as your software specialists, while the other project members are retained on your side.
This is one of our favourite engagement models, it’s proven to be very beneficial to most customers. We set up a dedicated developer or a Dedicated Team of developers to work on your project, engage with it and become an essential part of your team and company. It is very efficient and cost-effective, especially on a long-term basis. Our specialist software developers comply with the existing corporate culture, processes and best practices of your company.
This model, being the simplest approach to an outsourcing engagement — We find it works well for a long-standing client relationships and longer-term projects. We take a large responsibility for the dedicated team performance with considerations to ensure the team has a positive work environment, developers are motivated and personal advancement is encouraged.
Although the dedicated team may sound similar to the Time & Material model, it has some big differences. The pricing for this cooperation model is very transparent and the customers are usually billed on a monthly basis, that makes it easy to forecast and efficiently use the budget. With this approach, the customer forms the future team — the number and the necessary level of all specialists.
This can be useful for example, for long-term projects with unclear requirements or big in-house projects when the customer needs scaling of their in-house team. Also, our customers can manage the team by themselves, and the administrative part of the work falls on us, the development partner.
Choose Dedicated Team Engagement Model when:
- When you need more specialist manpower for your own in-house development team;
- When you want to make your costs more efficient. The remote team solves many time-related issues with the recruitment and hiring of staff, as well as the number of the group, plus you always know the next month’s payments;
- When you can perform full control and management of the team, determining the workload;
- When you have a clear vision of how your project should evolve and have enough time and resources to keep abreast of the management aspects;
Using this model for cooperation we fix the scope, budget and timeline. We deliver what we have agreed with you according to your requirements, within the timeframe we have estimated and on time.
However, it’s key to point out that this model will only be effective with thorough initial planning, estimation, and analysis sessions. The more planning you do, the better the outcome. So planning is key — Why? — The success of the Fixed Price project is directly proportional to the success of this initial phase. The slightest change in the scope can turn into endless negotiations between the parties with a negative impact on a product’s time-to-market.
The main benefit of selecting the Fixed Price engagement model is predefined and fixed project’s budget, which means you know exactly how much you are going to spend on your product.
Fixed Price is best at showing itself on short-term projects (about a month). For example, when a customer wants to work with a new provider, minimising risks with a small pilot project, which will take a month or two for development.
However, unlike Time & Materials and Dedicated Team models, Fixed Price assumes the availability of all necessary documentation for the project, all specifications as well as a strict implementation plan and workflows.
This approach can be used only when you are sure that the product requirements will not be changed in the future.
Choose Fixed Price Engagement Model when:
- Requirements and specifications are clear, well defined and unlikely to change;
- You have a small or medium size project which won’t last for more than a few months;
- When the development process and deadlines are approved in advance, so the project is likely to be ready and delivered on time;
- When you can keep track of the stage the project is at or how much it corresponds to expectations;
- As an option for startups — to create an MVP;
It’s worth mentioning that the Fixed Price agreement is a unified contract between the customer and provider, meaning it does not vary throughout the duration of the contract. More often, such model is used by companies when the customer already has constant specifications for the product, which will not change during the entire development period. This model is the choice of product companies that have a sufficient number of specialists who can confidently communicate with developers.
We can advise you on which engagement model will be best suited for your project — Whatever model you are considering, look at your development project with a long perspective. Even if you are sure your project will only take two weeks, the possible outcome might bring new opportunities.
Talk to Strides Empower about the different development approaches for your project requirements.