Why you should never be afraid of time and materials
If you’re a Miquido customer, you may know that we never work in a Fixed Price model. We’re not doing it to be difficult—we believe, wholeheartedly, in the benefits and advantages of working under a time and materials agreement.
Let’s think about it for a second, would you ever order a new suit without giving the tailor your measurements or buy a new car without knowing that the spec will cover your needs? Of course not! And yet we always seem to believe that a fixed price model is the most secure and riskless means ofcollaboration when really the alternative offers us much more control over the direction of our project.
Deciding everything in advance, when the project is in its infancy and ultimately at its least stable stage, means that fixed price rates can actually limit the scope and flexibility of the project. In many industries, time and materials is the only agreement through which a project may commence, this includes construction, the legal sector, financial services and many other areas. We advocate the Time and materials model as developers since it gives you, our client, the opportunity to provide feedback and enables cooperation to evolve throughout the project to ensure that everyone’s needs are met. By providing detailed breakdowns of work and costings, it gives our clients the peace of mind of knowing that no stone has been left unturned in the development of their project. Time and materials opens up the project beyond the standard framework of goods paid for and services provided.
What exactly is time and materials?
Time and Materials means working based on the needs and requirements of the project. Therefore, if Customer A agreed for Business B to work on their project, Customer A may request a time and materials contract, meaning that Business B has to carry out the labour based on actual costs and hourly rates. They will then invoice or bill Customer A for the works ongoing and Business B can work on the project within the agreed time frame and adapt to the needs of their customer. At the commencement of the contract, both parties agree on what materials will be used and on the hourly price, so even if the project takes much longer or much less time than anticipated, both parties can rest assured that they will be reimbursed and receive the work carried out or expected.
Why should I use time and materials when commencing a project?
Using a time and materials model means that the client can update and adapt the needs of their project as it’s in progress. It also gives clients the opportunity to be more involved and to offer comment on the direction of their task. As the rules are established at the beginning of the project, it’s easy for clients to negotiate on what can or can’t be spent and to plan for budget and time rather than blind expectations. Projects in technology tend to be dynamic. The potential for modification in the field is very high, even on a weekly basis. A time and materials contract means businesses can change the volume of work while saving time, revising materials or benefitting from a responsive work scope.
By using time and materials, a business can use the breakdown of costs to work out where their budget is going. On a fixed price costing, the project gets lumped under one title, one invoice and one cost and no thorough information is provided. Through time and materials, a business can assess their spending, prioritise areas for development and make cuts where necessary. A time and materials model also ensures effective planning throughout the project as the developer and client are fully aware of the direction, scope and timeline of the works.
Time and materials: The Benefits Breakdown
- Improved timing capabilities and thorough understanding of project scope.
- Communication throughout the project between developer and client, enable dynamic project management.
- Flexibility within the remit of the project allowing for an evolving strategy to best suit the needs of the client.
- Protection for both parties when paying for services.
- Allows for ever-changing project requirements based on industry circumstances.