What to choose: Time & Materials, Fixed Price or Dedicated Team

Published on: May 11, 2022
Last updated: January 30, 2023 Read in fullscreen view

Recommended for you

15 Feb 2024 What is a Cut-Over in Software Development? 190/1517
05 Mar 2026 Top 7 Full-Cycle Web App Development Companies for Your Business in 2026 161/211
17 Mar 2026 How Much Does it Cost to Build an AI Agent in 2026 157/226
02 Nov 2023 Differences between software walkthrough, review, and inspection 157/2299
08 Oct 2024 Vietnam: The Rising Star in Global Outsourcing – Trends and Costs for 2025 152/514
07 Jul 2024 Top Fintech Companies in Vietnam Driving Innovation Across Digital Banking & Investment 140/273
11 Mar 2026 OEM, ODM, and OBM in Software Development: Choosing the Right Growth Path 134/160
12 May 2021 The Real Cost Between Outsourcing IT vs In-House: A Quick Comparison 132/578
17 Mar 2026 Top 10 Product Development Companies in Chennai 2026 (Updated) 130/147
02 Feb 2026 What Is the Total Cost of Web Development for Small & Medium Businesses? 126/159
10 Mar 2021 The 7 Biggest Mistakes to Avoid Before Outsourcing a Web Development Project 124/357
16 Oct 2024 Building a Software Outsourcing Startup: Strategy Through Two Canvases 123/163
16 Feb 2026 Education App Development Cost in 2026: Benchmarks and Key Cost Drivers 123/181
11 Mar 2024 Why You Should Hire Odoo Developers from Vietnam to Customize Your ERP System 120/226
06 Feb 2026 How Much Does a CPA Cost for a Small Business? 118/141
01 Jan 2023 Top Software Development Challenges in 2023 117/436
05 Jan 2022 What Outsourcing Engagement Model is Right For You? 116/428
21 Aug 2025 Top 30 Oldest IT Outsourcing Companies in Vietnam 116/220
10 Jan 2024 Facts Chart: Reasons for outsourcing 112/266
05 Aug 2025 Why Doesn’t South Korea Outsource Its IT Projects Like Other Developed Countries? 111/216
19 Oct 2020 The hidden costs of outsourcing software development 107/575
01 Mar 2022 Top 5 reasons why outsourcing to Vietnam is a smart move 104/389
02 May 2022 What Is RAID in Project Management? (With Pros and Cons) 104/947
21 Oct 2021 Advantages and Disadvantages of IT Outsourcing 102/458
01 Jan 2023 4 New IT Outsourcing Pricing Models to consider in 2023 101/475
09 Sep 2022 Close Collaboration and Communication Can Overcome the Challenges of Distributed Teams 100/307
24 Nov 2025 Top Blockchain Companies in Vietnam 99/144
10 May 2021 What are things you should look for in a good IT outsourcing company? 98/543
31 Oct 2025 The True ROI of Software Development Outsourcing for Tech Startups 97/176
03 Dec 2025 IT Outsourcing Solutions Explained: What, How, Why, When 96/128
24 Nov 2021 What is the Actual Cost of Hiring Cheap Developers? 96/492
01 Sep 2019 Outsourcing Software To Vietnam: Facts, benefits and limitations 92/553
01 Jan 2023 Software Development Outsourcing Trends to Watch Out for in 2023 92/415
21 Oct 2025 Cloud-Native Development: Why It’s the Future of Enterprise IT 91/180
01 Jan 2024 What The World Is Flat Means to IT Outsourcing 89/257
01 Apr 2021 IT Outsourcing to vietnam: Why It Is A Good Choice? 88/385
15 Aug 2021 TIGO Rate Formula - Things the partners should know 88/616
01 Jan 2023 Top 5 IT outsourcing countries in 2023 87/362
13 Jan 2023 What are the Hourly Rates in Offshore Software Development? 86/327
15 Oct 2022 Project-based team model for one-off and pilot software development projects 84/910
13 Oct 2021 Why Outsourcing Software Development Services Is Gaining Traction With Non-Technical Leaders? 84/398
12 Jan 2023 Top 10 Trustworthy IT Outsourcing Companies in Vietnam 84/366
16 Dec 2021 Why outsource Python development of your project? 84/582
14 Dec 2021 The Top 10 Problems with Outsourcing Implementation and How to Solve Them 80/476
03 Oct 2020 Outsourcing Your MVP Development - Streamlined Solutions for future 80/506
17 Jan 2024 What are the benefits and challenges of using multi-sourcing or single-sourcing strategies? 80/282
19 Mar 2021 Selective Outsourcing of IT Functions - a new trend in business outsourcing 79/639
03 Jan 2023 IT Outsourcing Costs: Is outsourcing really cost-effective? 77/286
02 Nov 2023 What are the pros and cons of iIT outsourcing? 77/290
04 Apr 2024 Unlock Vietnamese-Japanese outsourcing potential 73/307
01 Feb 2024 How long does it take to develop software? 73/283
03 Nov 2021 7 phases of Odoo Implementation and Development: Can they be outsourced? 72/495
01 Jun 2025 10 Sustainable & Unique IT Outsourcing Companies in Vietnam 72/154
03 Nov 2022 Top questions and answers you must know before ask for software outsourcing 72/357
04 Jan 2021 VIETNAM AS A BIG ATTRACTIVE DESTINATION IN THE FIELD OF OUTSOURCING 71/395
06 Oct 2021 Intellectual property issues with outsourcing software development 70/455
21 Aug 2022 Forbes: IT Outsourcing Hotspot: Vietnam, A Small But Mighty Powerhouse 69/324
02 May 2021 Outsourcing Software Development: Avoid 8 Mistakes 69/206
12 Oct 2021 Vietnam outsourcing path - the silk road connecting ASEAN with the developed countries (EU, US, Japan...) 69/410
09 Jan 2021 How can outsourcing enable business agility? 68/258
22 Mar 2022 8 Mistakes Marketing Agencies or Consulting Firms Make When Outsourcing Web Development 67/412
10 May 2021 Project Audit and Second Opinion Services 67/312
28 Oct 2022 Expect the unexpected in 2023 - How Outsourcing Can Help? 67/271
01 Jan 2024 Hiring Tech Talents in Asia: An Overview of Skills, Costs, and Potential 66/225
15 Nov 2023 IT Staff Augmentation Types and the Best Choice for Your Business 65/275
17 Oct 2020 How Outsourcing can Improve Time Management for Better Business 65/361
01 Oct 2022 Vietnam is a favorite supply of IT outsourcing services to Japan 62/298
02 Mar 2021 Estimate the Cost of Software Development 62/425
01 May 2023 Streamline Your Business with Outsourcing 61/265
11 Mar 2023 Common Pain Points in Software Development Outsourcing 61/325
01 Jan 2024 Tech Partnerships: Choosing the Right Software Outsourcing Firm in Vietnam 61/233
01 Jan 2024 12 reasons for software development outsourcing 61/260
07 Nov 2024 Outsourcing Crisis Looming: Will Trump's Policies Transform the Global IT Landscape? 59/242
08 Aug 2021 Why Nearshore Software Development is better than In-House Development? 58/253
01 Jan 2024 Software Outsourcing Questions for 2024 57/206
25 Sep 2025 A Practical Guide to Secure Online Work for Outsourced Teams 55/149
01 Jan 2023 Why is Vietnam the Top IT Outsourcing Destination of 2023? 54/294
08 Feb 2022 Software Development: Fixed Cost or Opportunity Cost? 52/513
16 Mar 2021 Outsource Data Engineering Services - TIGO Streamlined Solutions 51/307
31 Dec 2021 Outsourcing Software Development to mitigate the impact of COVID-19 50/373
01 Feb 2023 [InfoWorld] Is your outsourcer agile enough? 49/242
08 Jan 2024 Outsourcing on an As-Needed Basis 47/212
21 Oct 2022 Outsourcing Billable Rate 46/315
25 Nov 2021 Low-Cost Software Development: Buy Nice or Buy Twice? 43/404
03 Jun 2026 Enterprise Guide to Choosing the Right Enterprise Application Development Services 32/35

Dedicated Team vs Time and Materials vs Fixed Price

Dedicated Team is a one-of-a-kind collaboration model that combines fixed-price and time-and-materials techniques. It provides you with a long-term remote team of hand-picked professionals, to provide software development services, assigned to your project. The primary goal of this concept is to compensate for a lack of required skills and knowledge in-house. You can manage the team yourself or hire a specialist project manager to help with communication.

The dedicated team cooperation model generally works with monthly payments based on team size, including labour costs and fixed service costs or a margin.

Read On: Dedicated Team vs. Extended Team: What’s the difference?

The time and material (T&M) approach allows for greater flexibility in terms of budget and project needs. In this circumstance, the overall cost of the project, as well as its scope, are unclear until the product is completed. It is totally determined by the amount of time and effort expended in putting it into action.

Time & material offers greater flexibility than the fixed-type

T&M Rates
Contractor is paid on the basis of:

Actual cost of direct labor, usually at specified hourly rates.
Actual cost of materials and equipment usage.
Agreed upon fixed add-on to cover the contractor's overheads and profit.

The fixed price approach, as the name implies, is based on a predetermined budget and timeline. This means that you and your vendor have agreed on a fixed price that you will be obligated to pay upon product delivery, regardless of the project’s actual timeline and costs.

How Do You Pick The Right Outsourcing Model?

To select the best software development business, consider the following factors:

Before you get to the ‘either or’ stage of onshore vs offshore teams, you need to understand your project’s requirements.
You will know exactly what to look for once you have a thorough understanding of the requirements. You can look for software development companies that have experience with the technologies required for your project.
When looking for a software development outsourcing company, don’t only believe what the company says. You can go around the website and see what kinds of projects it has performed.
When choosing an offshore or nearshore outsourcing model, you must be thoroughly informed about a company’s transparency standards and communication channels.

Conclusion

Each outsourcing model has its own set of advantages and disadvantages. The decision between a fixed price vs. a dedicated team or a fixed price vs. time and materials is based on the needs of your firm. You should be able to identify which of the three solutions poses the least danger to your company. If you still require assistance, you can contact a software development outsourcing firm that can assist you.

A A A A

[{"displaySettingInfo":"[{\"isFullLayout\":false,\"layoutWidthRatio\":\"\",\"isFaqLayout\":false,\"isIncludedCaption\":false,\"faqLayoutTheme\":\"1\",\"isSliderLayout\":false}]"},{"articleSourceInfo":"[{\"sourceName\":\"\",\"sourceValue\":\"\"}]"},{"privacyInfo":"[{\"isOutsideVietnam\":false}]"},{"tocInfo":"[{\"isEnabledTOC\":true,\"isAutoNumbering\":false,\"isShowKeyHeadingWithIcon\":false}]"}]

Via

{content}