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Fixed Price and Time & Material

How to combine them in order to gain a Win-Win Relationship.

Typical complex software development process consists of different levels and the choice of the pricing model must be custom-tailored to their nature. Preliminary conceptual phrase of the project (or of each milestone) is greatly managed by Time & Material Pricing Model. There are no limits for creativity, new innovative solutions, profiting from know-how and flexibility. There is time for agreeing details, targets, discussing what the deliverable should be. However, when only all required details are known and foreseeable, concept of work is clear and divided into milestones, Fixed Price solution is giving much more advantages for both partners. You as the Client know the price and deadline while the developer has clear instructions and minimum changes in his project. Both these pricing models can be a trap but can also bring great benefits. Making a hybrid of these two Pricing Models and managing them in a smart way can change the tension of initial negotiations into a Win-Win Relationship.

 

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