Time and material: the benefits
Engagement. With time and material, both parties keep their eyes on the ball. As an agency, we tend to your needs and keep the budget as tight (or as vast) as you want. We discuss any changes with you as frequently as is necessary, and determine development priorities according to cost estimates.
Flexibility. The number one benefit of developing with a time and material pricing strategy is the ability to postpone implementing some features that our client thought were inevitable. In more than a few cases, the initial RFP was very different from the final project.
Transparency. We don’t bill you for the time we don’t work on your stuff. You have full access to your expenses, and you decide what the focus should be. With a fixed price model, you don’t know if a certain task took four or 40 hours to complete.
Urgency. If you need something right away and don’t have the time to deliver a proper RFP for a bidding process, then time and material is the best choice.
Time and material: the drawback
Management. Some people say that time and material contracts may be problematic due to a potential lack of motivation by the contractor. We love what we do, so that’s not the case here, but we still need you to go through the work scope.
How much will the project cost?
The final cost may be higher than the amount budgeted at first. Let’s say that you estimate spending $30,000 on a website and an app; the final costs may very well be $20,000, but they could also be twice your initial estimate. But worry not – we inform you about any changes right away, and don’t do anything without your approval.
There’s also a third option. You can place a cap on our maximum charge. This model is called T&M NTE (Time and Materials Not To Exceed) and is often confused with fixed price projects. We don’t suggest this model due to its obvious limitations. In the practical world of software development, it works just like standard time and material, except for the cost limit. As a result, T&M NTE requires lots of planning and prioritizing.