The engagement model is a way of agreeing on the terms of transactions of the services and payments. It is a mode of collaboration in the IT industry when the businesses opt to outsource their projects to the top Software Development Companies.
While outsourcing is a cost-effective way to obtain quality products in the fastest possible time. It is also necessary to choose a suitable Engagement Model to save the hidden costs and the unnecessary stress of the work.
So, without any further ado, getting straight to the point.
In the IT industry, there is 3 mode of standard engagement which are stated as below:
- Fixed Price
- Time and Material
- Dedicated Team
As every client has different requirements about the products, similarly, they also have different needs about the way of handling the projects. Budgets are also considered as the primary factor behind picking any Engagement model.
Therefore, it’s necessary to understand them in detail.
Fixed Price Model
It is the traditional model in the industry which was once used as the only mode of engagement. The name of the model itself suggests that everything needs to be fixed or agreed upon before the project begins.
Not only the price but the scope of the project is also defined clearly in this model beforehand and gives no room for any improvements along the way.
The advantage of this model to the businesses is that if the complications happen along the way then the Software development company has to bear the extra burden of the costs.
Time and Material Model
As the time rolls down, new models evolve and gain momentum in the market. Time and Material Model can truly be said as an engagement model as the client and the company needs continuous interactions on a regular basis.
In this model, the price is paid off on the time spent after developing the product while trading it with the Material or the product which is developed through various iterations.
The benefit of this model is that the clients can give feedback and ask for the necessary changes in the product while the product is still in the development phase. This wasn’t possible in the Fixed Price Model.
Dedicated team Model
This is the best Engagement model for the businesses that want to hire a Software development company as their technology partner and want to develop a long-term business relationship.
In this model, the business hires an entire team including designers, developers, QA engineers, etc. and pays them their salary and a fee to their provider as the team works as your own employees on your own software development project.
The biggest advantage of this engagement model is that you will have complete control over the team and the project.
Though every model has its pros and cons, it is up to the requirements of the businesses that ultimately become the key factor for choosing the appropriate engagement model for the product development.
In this article, I tried to give you a short description of the Engagement models used by the businesses in collaboration with the software development companies. In case, if you have any queries or suggestions then please share it with us in the comments section below.