Different Models For Engaging An Outsourced Software Development Vendor 2048x1152 1

Once you have decided to engage a vendor for your software development, you will have to decide on an engagement model that works for you. Each model has its pros and cons.

What is an Engagement Model

An engagement model is a framework within which you operate with your software development vendor. This serves as the foundation for the relationship between you and the software company, which will help you promote future collaboration and ensures the success of current and future projects.

How to Pick the Right Engagement Model


Before proceeding, ask yourself a few questions

  • Is your project a simple MVP (Minimum Viable Product) or a complex project?
  • Do you have a fixed budget for your project? Is it important for you to know how much your project will cost in advance?
  • Do you know well how your project will look and work like when finished? Or do you want your project to be flexible and add requirements as the project progresses?
  • Do you have enough time to take the project to market? Or is it important that the project reaches its end-user as quickly as possible?
  • What is the timeline of the project? Can the timeline change, or is it fixed?
  • How well can you  manage the project during its development phase?

Different Types of Engagement Models

Fixed Price Model
fixed price

In this model, the company should be very clear about the project requirements, the deadlines, defined goals and specifications of the project. The company should spend their initial time planning the entire project.

More Planning = Better Outcome.

The slightest change in the requirements can be difficult for both the parties and this will hamper the project release and will most likely shoot up the costs in an unpredictable manner. The major benefit of this model is that you have a fixed budget and you will be well aware of the cost for the project.

When can you use the Fixed Price model?

  • Requirements are clear and well defined.
  • Short-term Projects.
  • MVP projects.
  • Small to medium projects.

Pros of Fixed Price Model

  • The project cost will not exceed the agreed budget.
  • Predictability of the project helps you forecast expenses before the project starts.
  • Requirements and specifications are well defined to give an idea of the final project.
  • The workflow of the project is simple and easy to monitor.
Cons of Fixed Price Model
  • Proper gauging and communication of the right requirements and specifications is crucial.
  • The project is not flexible.
  • Proper planning before project commencement is mandatory.

Dedicated Team Model

This model will have a dedicated team to work only on your project. This is the best engagement model if you are looking for a long-term relationship with your service providing company for a complex project. You rent an entire team with the different skill sets required for the project and pay them a monthly fee and an additional service fee to the company providing the team. The team will report to you and follow all the policies of your company according to the initial agreement decided between the company and service provider.

The company will have to spend a good amount of time with the team to keep the project going and check the process.

When can you use the Dedicated Team model?
  • When your in-house development team needs more personnel to support them in an ongoing project.
  • For short-term projects.
  • For long-term projects that require original and flexible changes during the development process.
  • You can use this when you want different minds and cross-border knowledge in your ongoing project.
Pros of Dedicated Team Model
  • This model is a good choice for flexible projects and you can change the requirements at any time during the project.
  • You can have different minds working and sharing their knowledge and tips across different borders.
  • You will have full control over the team and project and can monitor the progress of the project anytime.
Cons of Dedicated Team Model
  • The teams’ workflow and responsibilities will be pre-decided by your company.
  • There might be a conflict between the in-house team and dedicated team members, due to difference of opinion and ideas.
  • It is a time-intensive process, mandating involvement with the team at every stage.

Time & Material Model

time and material

Time and Material engagement model is gaining popularity rapidly in today’s world. In this engagement model, the cost spent is equated to the time spent by the software development company on the project.

Cost Spent = Work Delivered.

At every stage of  development, the software development company will deliver the project based on the requirements or features mutually agreed on. On the basis of this, the changes can be conveyed to the development team, or proceed to the next set of requirements or features. One of the advantages of this model is that you can prioritize your features or requirements beforehand.

In this model, defined requirements and specifications will expedite the project delivery deadline. If the requirements are not defined, then the project will require more time, resources and will cost you more. There is no budget prediction in this model.

When can you use the Time & Material Model model?

  • A complex project with multiple iterations.
  • Evolving and unclear requirement in a long-team project.
  • You expect transparency in the relationship between your company and software development company.

Pros of Time & Material Model

  • You can make changes to improve and evolve in the project anytime during the process.
  • This model is low risk, you can prioritize the requirements and ask for changes in the resources required at different stages of the project.

Cons of Time & Material Model

  • The overall budget can exceed the expected budget if requirements and features change in the project development stage.
  • If the requirements or changes are increased during the project development the delivery date of the final project will be delayed.

To conclude, the choice boils down to picking a model that works for your current needs. This also requires that you gain clarity about your project s in terms of goals, so a suitable model can be matched.

Contact us to find out the engagement models followed by Techpearl to develop your software products and choose the most suitable one for you

Read More Articles

Serverless application
AWS Serverless

Serverless Application

Serverless architecture is a software design pattern where applications’ hosting is outsourced to a third-party service provider, eliminating the developer’s need for server software and

 Contact Us Now

Talk to us to find out about our flexible engagement models.

Get In Touch With Us