In our experience, clients choose between these two models most of the time. They’re the two most popular models for pricing software development today, which at the same time diffe saudi arabia whatsapp in many aspects. Each of them has its own characteristic benefits and drawbacks. They also match completely different projects.
Read on to find out everything you need to know before you start negotiating with a software development company that will be responsible for realizing your project.
Time & Materials and Fixed Price contracts in software development – introduction
Before we begin our comparison – Time and Materials vs. Fixed Price – here’s a quick recap of the basics about the two pricing models.
What is the Time and Materials model?
Time and Materials (aka T&M) is a standard phrase for a (software) product development contract. In this model, you pay for the actual time the team spent on developing your product, together with the cost of all the materials and equipment used in the process. Time and Materials is generally used in projects where it is not possible to accurately estimate their size, and requirements are dynamic.
The model requires careful estimation of the time, scope, and budget – but these values are still flexible and can be agreed upon on a regular basis during the development process. If you choose this contract, you’ll be settling payments within the previous-agreed intervals – for instance, on a monthly basis.