TIGO Rate Formula - Things the partners should know
Published on: August 15, 2021
Last updated: May 11, 2024 Read in fullscreen view
Last updated: May 11, 2024 Read in fullscreen view
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We share our rate since we think it's good and fair for partnership. Both sides can shorten the time for negotiation while reaching the maximum the efficiency.
Standard Rate (SR)
It is the minimum direct cost which is the fair price in our IT market
Conditions: Depend on technology selection (mature, outdated, cutting-edge, bleeding edge, leading edge) and TIGO's current capabilities.
Assumptions: CR doesn't cause scope creep. The burn-up line is ideal (CR <= 15%).
Ideal duration: 3 months.
Ideal team size: 4 full-time Dev, 1 PM, 1 BA, 2 QA.
Flexible Rate (FR)
FR = SR * (3 / D) * CO
Purpose: More flexible rate depending on project characteristics
In which:
- D: Project duration (months)
- CO (Communication Overhead) is the negotiable/agreeable level about: (1) Direct communication between members (without BA/PM). (2) English proficiency level of Senior Staff
- CO is applied when requirements aren't complete, or unplanned CR is a part of contract.
- CO = 1.2 if PM or BA join POC analysis daily with clients (assuming highest English proficiency and good communication skills).
- CO = 1.5 if the team structure is similar to the dedicated team model. In which, the PM and Senior Dev join all communications with the partner team.
- CO = 2 if it is dedicated team engages with the partner team (n x n communication), pair working is preferable than PM/BA involvement
Example:
SR = 10 USD/h
D = 2 months (i.e. fast track, crash schedule)
CO = 1.2
Then FR = 10 * 3/2 * 1.2 = 18 USD/h
Flexible Rate 2 (FR2)
FR2 = FR * (1500 / MD) * (0.8 + NBR)
Purpose: Extending FR1 (above) assuming that experience curve results in "lower cost, higher quality, faster time-to-market"
In which:
MD: Total man-day
NBR (Non-Billable Rate) = Non-billable hours / Billable hours
Apply when:
D >= 5 (months) and MD >= 1500 man-day.
Example:
FR1 = 18 USD/h
MD = 2000 man-day
NRB = 0.1 (10% for project preparation and non-billable activities)
FR2 = 18 * (1500/2000) * (0.8 + 0.1) = 12.15 (less than FR1)
Bundled Rate (BR)
BR is applied for specialists working on specific niches (unknown unknowns) or bleeding-edge technologies (such as AI, blockchain…)
TIGO set to offer the rate lower than the big vendors. In return, ramping up a large team takes longer.
Note about bundled rate:
A bundled rate is set for each TIGOSOFT developer. You are only charged for a developer’s time which includes ¼ time of a QA engineer, a Project Manager (or SPoC) or a DevOps specialist (can be replaced by a sustaining engineer as well). In other words, a bundled rate is the rate that is preferable if you are opting for our all-inclusive services.
Key Takeaways
The average hourly rate for a software developer in Vietnam stands at approximately $20 (falling within the $15-30 range), significantly undercutting the rates typically found in other outsourcing destinations such as India or China. To streamline your business with the right balance between low-cost and minimum viable products, you can generally expect to pay between $15 and $25 per hour for offshore software development services.
We are a global IT outsourcing and consulting company who delivers innovation and sustainable growth with great commitment to quality and satisfactory outcomes. Work with us to go faster and better!
CUSTOMER-CENTRICITY IS OUR TOP PRIORITY
TEAMWORK MAKES DREAM TEAM
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