their pros and cons and how they operate.
Read on to get the know-how on which is best for your business!
The Fixed-price model
This traditional model remains popular for its predictability and simplicity. Here’s how it works:
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timelines, and budget plans. The Fixed-price outsourcing model could be your go-to option. The outsourcing partner provides you with a fixed project cost upfront in this approach. This cost remains unchanged, regardless of the actual time and resources invested by the outsourcing team.
Pros:
Costs are 100% predictable from the start
Zero surprises or cost overruns if requirements are locked
Simple to budget and get financial buy-in
Cons:
Specs need to be highly detailed
Scope expansion is a project killer
Change requests can delay delivery and bust bus
What it’s best for
The Fixed Price model is ideal for well-defined, short-term projects with limited room for scope changes. It works well when you clearly understand your project’s specifications and can provide precise documentation. It’s not so great for complex software with shifting requirements.
The Time and Material (T&M) model
With T&M, you pay hourly o