Have you ever been in a situation where you want to hire a firm to develop a web or mobile application but are not sure which engagement model to choose out of the three popular engagement models i.e. Agile Team, fixed price and time and material (T&M)
Since different type of engagement models are suitable for different types of projects, having a clear understanding on pros and cons of each engagement model helps in taking an informed decision so that you get a better ROI and a smooth relationship.
Before going into details of pros and cons let us try to understand these engagement models in detail:
This is a model best suited to build products where the idea validation is the key and based on a positive market response the product development happens iteratively and incrementally there. This usually begins with building a MVP, the minimum viable product, which guarantees the minimum investment and early time to market for concept validation or for building traction for funds for a full-fledged product. This is also suited for projects where the entire scope cannot be ascertained upfront and the team starts working on small increments of the project as they gain clarity on the scope as the project evolves. The agile team consists of a team dedicatedly devoted to the product. Since the premise is that the product is build incrementally due to a limited horizon, the cost for the entire product cannot be ascertained upfront. However, you are still able to estimate the effort and cost for the MVP or first release of the project. This MVP typically is built in 12-14 weeks depending upon scope and complexity of the product.
How this works is that you provide us initial requirements which could be either an idea or a concept, or a loose ended scope or feature list. Based on the initial requirements and your ideal time to market, we will allocate an Agile team with people best suited for the job.
Not only that, we will also tell you the monthly cost you will be paying for these resources and what scope we will be delivering every month so that you don’t have to worry whether you will ever raise funds for the complete project scope but rather you can show something to the investors and raise money or receive valuable feedback on how to improve further until it is accepted by the market.
This also gives you the flexibility to scale up or scale down the team strength. The team will report directly and regularly to you and you have control over all aspects of the project. We will monitor the project for quality standards and step in whenever necessary.
When Net Solutions was approached by manufacturing client to build a mobile app to improve project management and communication within his business environment, he had a clear list of requirements. He wanted to see the first release of the app as soon as possible. Considering his needs, we advised him to hire an Agile team to deliver a MVP with a finite set of features to be delivered within a time duration. This team included crucial team members including Business Analysts who serve as the product owner, the scrum master, a technical architect, UI designers, Developers and QC members. The requirements were decided and presented to him in Sprint zero and we reached out to him for feedback after every subsequent sprint. This way we were able to give him an estimation of an initial release i.e., the estimated cost and time required for the initial sprints. Using AGILE we were able to show some deliverable to him after every two weeks. The idea was to discover and scope out the requirements enough for two weeks so that something tangible is there to go and test thereby avoiding weeks and months of analysis and rework.
One of the most commonly used model, this is ideal when you want to make sure, you want the estimated costs to be known upfront before investing a dime. The caveat here is that it demands complete clarity and a well-defined scope to provide correct estimates on budget and timeline.
How it works is that is that once you get in touch with the agency for a quote they will ask for project scope or a feature list to estimate.
Good agencies will develop the scope for you in case you don’t have documented it yourself. They might ask you several questions to clarify the scope and you might end up exchanging multiple e-mails or phone calls before there is a document or RFP in place which is good enough to estimate. You might feel too much to invest time with them in defining the scope but the more you work on it and ensure everything is covered the more accurate estimates you will get.
Good organizations spent some time in preparing an RFP (Requirements for Proposal) before they send any project for estimation.
Xerox wanted to approach a large company that was active in the sea exploration space in the Northern Sea. They wanted to build a Proof of Concept (POC) iPad app for their client’s staff, which was an interactive map to help users locate different areas of the oil refinery. The ultimate goal was to use the POC iPad app as part of a pitch for a bigger project. They sent us a RFP (Requirements for Proposal) listing down each and every detail and for which they needed a quote upfront. Since the requirements were very clear it was easy to provide a quote considering all the known risks
Time and Material (T&M)
Last but not least, there is also a time and material (T&M) engagement model.
It is something similar to the pay as you go model that is increasingly used in cases where it is not possible to estimate a project or fix bugs in an existing project or in those cases where the requirements are so dynamic that they keep on changing. The amount that you need to pay will depend on the time that the developer spends on completing the project.
This engagement model is often preferred because of its flexibility. You can change the people working on your project, depending on the requirement or the stage that the project is at.
This is because you will be getting the best people working for your project whenever there are major changes.
When Truffledig, a startup from New York, worked with Net Solutions to develop an online gifting platform targeted towards customers visiting coffee shops and restaurants in New York City, we advised them to build a prototype first with limited features and test the prototype locally in New York to determine whether their concept would be accepted in the market, and whether it would be a financial success, before they tried to scale it.
The initial prototype was built using hourly engagement model since the client could track the visibility of work done by the teams since they fly down to Net Solutions office to closely work with the team.
Comparison of Engagement Models
Following is a quick snapshot which will help you to take an informed decision on choosing the ‘right’ engagement model for you.
Although the information and comparison chart will help you in taking an informed decision, selecting the right engagement model is still very tricky.
It is always good to list down all your priorities like budget, timelines, flexibility on collaboration, clarity in scope, minimum period of engagement for which you need to hire resources etc. before you proceed with development. For more details feel free to get in touch with us and discuss this detail by completing the Request Free Consultation form below.