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Different Pricing Models For Client To Choose For Their Projects

Indeed, setting up a price tag for the project might be a difficult task when you have a list of companies in your hand. Before making any important decision, you may take a deep-dive among them to get the best price for your project. Moreover, most companies have their pricing models, based on project scope and duration, to work with the clients, while the client and contractor duo work reflectively to decide a pricing model on the various aspects. Whether you are a large organization or a freelancer, there is no single way to go with. Choose the right pricing models to drive your business constantly.

Here We Are Going To Discuss The Different Pricing Models Which May Help You To Lead Your Project.

Fixed Price Model

Fixed Price Model

Various IT Companies follow this model to deliver some specific requirements of the client at the fixed price and the shortest time. This model is quite popular among the companies as this model offers plenty of benefits to both client and company. The project under this model is well-documented and shows a clear contractual agreement signed between client and company. This model has some scopes which may effect on the company’s performance. If you have basic project requirements then this is the best option for you.

Advantage

  • Low risk
  • No extra payments
  • Clear requirement
  • Clear supervision
  • Project transparency

Disadvantage

  • Lack of communication
  • Lack of control over the project
  • Security

Time and Material Model

Time and Material Model

This is a suited model for project development without any limitation. In this model, the client pays to the developer on hours bases plus the cost of materials and other expenses. There is no pre-defined vision or goal as you can define the specifications of the project at any stage. The most important feature of the Time and Material Model is its flexibility as the one can change the requirements and scope of the project and can involve users to complete the project.

Advantage

  • No clear limitation
  • Clear project transparency
  • Predictability
  • Regular communication
  • Flexible budget

Disadvantage

  • No deadlines
  • Less secure
  • Less accountability

Dedicated Team Model

Dedicated Team Model

A dedicated team model is the most efficacious choice of clients for their project. In this model, the client and outsource company has come in collaboration on the business project. The outsource company entrusts a team of well-skilled professionals to the client to work on a particular project, consequently, the client has full control over the team and project. It is hard to calculate the overall time in a closing of the project as it may vary depending on the project requirements.

Advantage

  • Long term commitment
  • Full control over the team
  • High Quality
  • Efficiency and speed
  • Project scalability

Disadvantage

  • Low efficiency for short-term project
  • Expensiveness

Project Fees

Project Fees

The project fees come to make a fixed amount of the project. The client and outsource company agree to the fixed price of the delivery of the project. This model provides plenty of opportunities to both client and service provider. Moreover, this is the best-suited model to enhance the scope of your project.

Advantage

  • Fixed amount
  • Regular communication
  • Customer satisfaction
  • Less complexity

Disadvantage

  • Lack of Creativity
  • Time-consuming for preparation

Performance Based

Performance-Based

The performance-based pricing is becoming much popular in the IT industry. This model is based on the performance of the service providers for which they get paid. Moreover, various companies work in the way to provide a positive outcome and maintain their services accordingly.

Advantage

  • Pay for result
  • Reduced risk
  • Task flexibility
  • Good control over the team

Disadvantage

  • No cost estimation
  • No rigid timeframe
  • Long disputes
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