Hiring off-shore developers at a fixed cost looks lucrative but a dedicated hire model can only meet your application goals.
Most IT firms that believe in outsourcing their projects prefer to work on fixed price model to get the visibility of investment that they are going to make in the project. After taking the quotations from lot of offshore companies the pricing are compared which leads to the price war. Looking at some of the attractive and low fixed price costing IT firm’s fall into the trap which finally leads to an unsuccessful product and diminishes the reputation of offshore companies. Hence OpenXcell offers time and material model at a reasonable price which leads to the WIN-WIN condition for both IT firm and the offshore company.
Fatal problems of fixed price project model
Fixed price model comes with following limitations and problems:
Fixed price model comes with following limitations and problems:
1. The offshore company has to always over-price the development by considering the risk of changes at time of development.
2. It increases cost by including the effort of project analysis and quotation making which is billed to client in fixed price.
3. There is very high possibility of wrong estimation, which leads to re-pricing or project cancellation.
4. Pressure of completing projects into fixed price leads to lesser attention to details of requirement.
5. Fixed pricing compels offshore companies to make resource work on more than one project which decrease the efficiency of resources and finally leads to less attention to details.
6. Fixed price decreases the scope of consultation, suggestions and education provided to customer while development.
7. Offshore companies are less worried about the support and maintenance for projects done in fixed price.
8. Offshore companies losses flexibility of incorporating changes at time of development and force project to go on phase wise development.
9. Due to working of resource on multiple projects, the risk of missing the deadlines increases.
This all leads to development of poor software and dissatisfied clients in the end with no repeat business and bad reputation for offshore companies. So it is totally LOSE-LOSE condition.
Most IT firms that believe in outsourcing their projects prefer to work on fixed price model to get the visibility of investment that they are going to make in the project. After taking the quotations from lot of offshore companies the pricing are compared which leads to the price war. Looking at some of the attractive and low fixed price costing IT firm’s fall into the trap which finally leads to an unsuccessful product and diminishes the reputation of offshore companies. Hence OpenXcell offers time and material model at a reasonable price which leads to the WIN-WIN condition for both IT firm and the offshore company.
Fatal problems of fixed price project model
Fixed price model comes with following limitations and problems:
Fixed price model comes with following limitations and problems:
1. The offshore company has to always over-price the development by considering the risk of changes at time of development.
2. It increases cost by including the effort of project analysis and quotation making which is billed to client in fixed price.
3. There is very high possibility of wrong estimation, which leads to re-pricing or project cancellation.
4. Pressure of completing projects into fixed price leads to lesser attention to details of requirement.
5. Fixed pricing compels offshore companies to make resource work on more than one project which decrease the efficiency of resources and finally leads to less attention to details.
6. Fixed price decreases the scope of consultation, suggestions and education provided to customer while development.
7. Offshore companies are less worried about the support and maintenance for projects done in fixed price.
8. Offshore companies losses flexibility of incorporating changes at time of development and force project to go on phase wise development.
9. Due to working of resource on multiple projects, the risk of missing the deadlines increases.
This all leads to development of poor software and dissatisfied clients in the end with no repeat business and bad reputation for offshore companies. So it is totally LOSE-LOSE condition.