Time and material (T&M) models assume that clients pay for real work on a range-based price per hour. The major benefit of the T&M model is adjustability and the option to modify conditions and rules, switch routes, and change features.
T&M is a perfect choice when:
You have a durable project with dynamic conditions
Project workflow is not yet completely established
You need to be flexible to adjust the scope or modify the workloads
Time and Material Pros:
- Adaptability. Time and materials contracts enable the business to adjust the amount of work, review materials or plans, change the focus, or modify features following the project executions.
- Dynamic workflow for large projects. You should always have a general, global goal; however, understanding how exactly it will be reached and which steps have to be done is not that important. For startups and small companies, it is often better to decide in the process, developing a strategy, and building custom software at the same time. This a baseline of Agile methodology.
- Good timing. You can save time by avoiding a fixed-price requesting process. Additionally, mixed rates enable you to understand how long it takes for the team to work with each feature, and thereby enable them to work most efficiently.
Time and Material Disadvantages:
- Poor control over the budget is the main drawback of a T&M model. The total final cost could be much more than the initial budget.
- You must be deeply engaged in the process to ensure the team is working toward the agreed flow and under the right amount of hours.
Software outsourcing within the Time and Material model is a perfect option to carry out software development projects where it is complicated to outline the size of work and specific demands in advance. The client pays for the factual work of the developers. This allows us to modify priorities according to a cost-effective approach. The major risk for the client is the unpredictable growth of the project’s timing. Separating tasks between subprojects helps you keep control over the partners.