Confusion is a word we have invented for an order which is not yet understood!
The continuous rapid growth of the global outsourcing market, especially pertaining to software development projects has helped countless businesses in improving their customer service, cost-cutting, and subsequently, sales. But the cost of getting these projects done differs from company to company, depending on your software development team’s pricing model, expertise, and location. The biggest dilemma faced by the outsourcers is comparing fixed rate vs hourly rate. Here’s a sharp contrast between both these pricing options to help you make an informed decision!
In a fixed bid agreement, the scope of work and the estimated time required to complete that work is decided well in advance. A price for these services is fixed mutually by both parties and this price cannot be changed later on. Usually, when you hire dedicated developers from India for a small to medium-sized software development project with strict deadlines, short timelines and a limited budget, this type of pricing model is an ideal pick. The risk associated with the fixed-rate model is mainly that you cannot alter your project requirements or influence the overall development process.
If you hire dedicated developers from India on an hourly rate model, it implies that there is no fixed price set between both the parties. However, you pay for every hour that your remote development team works on your project. Also known as T&M (Time and Materials) contract, this type of agreement is ideal for outsourcers who seek high flexibility within their software development process, especially if it involves Agile framework. The hourly rate model works best for software development projects, wherein it’s difficult to estimate the project’s completion time at its start.
We understand that the choice between fixed-rate vs hourly rate can be overwhelming. But if your hired virtual employees are experienced and professional, the chances of your product’s success increase manifolds irrespective of the pricing model you opt for. So, choose your remote IT service provider wisely!
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