Fixed Cost

Are you concerned about cost fluctuations, especially in offshore projects? Are you looking for a technology solution that has detailed and clearly-defined specifications? If the scope of the projects doesn\’t change during implementation, then this model is a good choice for you. In the beginning of the project, our technical and project staff will engage intensively with your staff to ensure that we acquire a thorough knowledge and understanding of your requirements. The target cost of the whole work is defined beforehand as well as the project timeline. Fixed Cost projects put down all the risks on the outsourcing company as the price is fixed, so that there is no risks for the client. This engagement model doesn\’t require close client\’s supervision, but presupposes some scope-related risk for both parties, since any deviations from the original plan will result into additional expenses.

Based on our past experience, the successful delivery of fixed-price projects always requires a comprehensive requirements specification which has clear acceptance criteria and defines the system requirements to a level of detail and precision such that each individual requirement is test-able. This requirements document may be the result of an earlier consulting engagement with Flexasoft or the customer\’s own analysis.

Advantages of Fixed Budget Model

  • The client has a clear plan of his costs as the price of the project and the payment scheme is defined beforehand.
  • Fixed Cost projects have well-defined timeline and development plan.
  • This type of engagement model provides full control over each stage of the development.
  • Periodic status reports, cost control, and quality, regular follow up with client, of deliverables are guaranteed

Drawbacks of the Fixed price model:

  • Demands ability and time to precisely define requirements, timetable, and approval criteria.
  • Less flexible in management of additional features and changes, each request results in re-negotiation of the delivery schedule and price.
  • Due to lack of direct communication between client and provider there is possibility of quality issues and dissatisfaction with the end product.

Model based on fixed time and fixed price is easy to understand and involves the following stages:

  • Client sends an inquiry and project requirements.
  • Service provider and client negotiate all the details.
  • Service provider sends final proposal, billing and schedule.
  • Both parties negotiate agreement and project development begins.
  • Service provider gives fully implemented solution.
  • Client approves the project.

Flexasoft works using Fixed price model for projects to guarantee that end product will be delivered on time, within budget and will correspond to the requirements defined in the agreement.