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Engagement Models of IT Company

The Engagement model is the framework that governs the way in which a vendor provides its IT services to its client. It basically describes the process of engagement of both the parties including duration of the contract, obligation, responsibilities and commitments as per the perspective of both the parties. There are various engagement models depending upon the type of contract and an organisation has to follow one considering the business requirements.

Let’s have a look on the different client engagement models and for the scenarios they fit in:

The Fixed Price Model:

This Engagement model is completely dependent upon the pre-determined project cost. It is considered as the ideal model to be applied if you have a pre-defined set of requirements about the application that you wish to develop. The project cost and the scope is clearly defined at the time of signing the contract and as per that the execution is done. The project costs in these types of projects have their pre-defined payment milestones as per the course of completion of the part of the project. This arrangement enables the client to have an idea on the continuous progress of their project as per the time and the payment due to which the risk can also be minimized. It is better to be prepared that scope may slightly change during the course of project as per time. In such cases management process is changed where the time and cost is revised with the approval of both the parties.


The Time and Material Model:

This Engagement model is generally used as its abbreviated form, T&M Model. This model is involved in the situation where the project scope is dynamic and can evolve with time. The vendor agrees to provide pre-defined skill sets and time-based billing rate for each resource type. This generally comes into the scene where we have continuous product evolution programming, complex large-scale projects, research and consulting assignments, solution designs and support and maintenance contracts.

Many times this engagement model is considered as a Requirement Analysis exercise in order to reach the defined scope and to push it into the Fixed Price Model category. The most important facility that this model provides is to change the project as per the technology and market trends or business priorities.


Off Shore Development Center:

This Engagement model involves teams that are an extension of the client’s team that is placed at different location. This can be maintained by the offshore team that has proven offshore delivery capabilities. This provides benefit as the team can be scale up and down as per the requirement. A team provided by ODC offer a set of resources with relevant and predefined skill sets of which the client has the full access to monitor or change or trach the work.

  • The SLA/ Milestone Based Model: In this client engagement model the vendor aims to deliver specified milestones of the project. This proves to be well in term of delivery as the milestones are predefined and with no ambiguity and the roles and responsibilities are clearly demarcated by the parties.
  • IT Staff Augmentation: This model allows clients to spruce up their in-house team with resources supplied by vendor company. This model allows flexibility in scaling up teams as per seasonal demands and also proved to be cost effective as there is no need to hire a full-time employee. It is good when you have to go with a QA requirement with the work done by the in-house teams.

There is no “best” universal client engagment model to match every company’s needs. We offer a full spectrum of engagement options to suit your business needs; to help you enjoy the benefits of external expertise, cost management and risk mitigation.