FIXED PRICE ENGAGEMENT MODEL
The Fixed-Price Model is an engagement which involves a finite set of deliverables. A company which has a project that is highly-defined can give this set of work to TEAM. TEAM will then analyze the requirements to provide the client with a Detailed Effort Estimate and a corresponding cost to perform the work. Once the work is completed, our respective parties either move on together to a new project or we shake hands and walk away.
Many companies which have decided to outsource begin by looking to engage a vendor on a Fixed-Price Model, without a complete understanding of whether or not it is best suited for their business operations. For many business operations, the Fixed-Price Model can result in significantly higher costs to the client, especially if requirements specifications are not highly-defined and/or the client anticipates any changes to the plan along the way.
Strengths:
• Best-suited for companies with singular highly-defined projects
• Client can depend on a static price to produce a deliverable (assuming no unforeseen Change Requests)
Weaknesses:
• Analysis of Requirements Specifications and the Detailed Effort Estimate is billed on a Time & Materials basis since the amount of work involved is uncertain
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• Formal process to account for Change Requests to a Project Plan is necessary since time relates to the Fixed-Price quote
• If client chooses to engage TEAM on multiple occasions, the personnel may not be the same due to gaps between projects
Request a free quote and let us provide you with the best services using the most suitable engagement model.
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