Hire Dedicated vs Fixed Cost Engagement Model

Once you decide to outsource your project or product, the first thing that bothers you is choosing right model of engagement that assures you minimum risk with optimum returns. Choosing the right engagement model is decisive factor for success of any outsourced assignment. The two most prevalent engagement models for outsourcing your IT initiatives are: Engage with some software development company to do the whole project at some fixed price or Hire engineers to do the whole project at some fixed monthly fee and manage them as if they are employees of your company.

Both models have some advantages and disadvantages, and based on extensive experience of offering the two models, we tried to compare the two engagement models based on some important criteria of project execution as follows:

	Fixed Cost Model	Hire Dedicated Model
Scope/Requirements	Require well defined SRS to estimate scope of work and cost	No need for a well defined SRS, specifications can be developed partially and projects can be organized using agile methodologies.
Development Methodology	As defined by development team based on project nature	Defined by client based on their preferences
Communication	As preferred by development team, well defined communication points	No communication layers, straight communication between client and the developer
Development Tools & Environment	As preferred by development team for accelerated development	As preferred by client
Project Management	Done by Project Manager at Rightway	Client has full control over the team working for him and has to manage the whole project execution process
Deadlines & Deliverables	Rightway is responsible for meeting all deadlines & deliverable on time	Client has to manage deadlines & deliverables in coordination with dedicated developer(s).
Cost	Fixed Cost for entire project execution & delivery	Fixed monthly billing for each developer
Reporting	As per the status reporting process defined by Rightway	As per client preferences on hourly/daily/weekly basis
Quality	Rightway ensure the quality of the final solution by extensive and in-depth QA efforts	Rightway ensures the quality of development done by individual developer but do not perform additional QA of work done by dedicated developer(s)

If you are still confused about which model suits best to your requirements, do contact us. It will be interesting to know your requirements and suggest you the best option.