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? 125/1426
07 Jul 2024 Top Fintech Companies in Vietnam Driving Innovation Across Digital Banking & Investment 109/218
17 Mar 2026 How Much Does it Cost to Build an AI Agent in 2026 93/144
05 Mar 2026 Top 7 Full-Cycle Web App Development Companies for Your Business in 2026 90/110
01 Jan 2023 Top Software Development Challenges in 2023 88/402
08 Oct 2024 Vietnam: The Rising Star in Global Outsourcing – Trends and Costs for 2025 86/444
17 Mar 2026 Top 10 Product Development Companies in Chennai 2026 (Updated) 85/97
02 Nov 2023 Differences between software walkthrough, review, and inspection 81/2192
05 Jan 2022 What Outsourcing Engagement Model is Right For You? 81/392
12 May 2021 The Real Cost Between Outsourcing IT vs In-House: A Quick Comparison 81/521
10 Mar 2021 The 7 Biggest Mistakes to Avoid Before Outsourcing a Web Development Project 81/314
10 Jan 2024 Facts Chart: Reasons for outsourcing 78/232
06 Feb 2026 How Much Does a CPA Cost for a Small Business? 78/90
02 Feb 2026 What Is the Total Cost of Web Development for Small & Medium Businesses? 77/105
21 Aug 2025 Top 30 Oldest IT Outsourcing Companies in Vietnam 75/178
16 Oct 2024 Building a Software Outsourcing Startup: Strategy Through Two Canvases 69/101
11 Mar 2026 OEM, ODM, and OBM in Software Development: Choosing the Right Growth Path 67/76
09 Sep 2022 Close Collaboration and Communication Can Overcome the Challenges of Distributed Teams 67/269
11 Mar 2024 Why You Should Hire Odoo Developers from Vietnam to Customize Your ERP System 65/170
24 Nov 2025 Top Blockchain Companies in Vietnam 63/107
24 Nov 2021 What is the Actual Cost of Hiring Cheap Developers? 63/452
19 Oct 2020 The hidden costs of outsourcing software development 62/525
21 Oct 2021 Advantages and Disadvantages of IT Outsourcing 61/413
01 Jan 2023 4 New IT Outsourcing Pricing Models to consider in 2023 61/431
01 Mar 2022 Top 5 reasons why outsourcing to Vietnam is a smart move 61/341
03 Dec 2025 IT Outsourcing Solutions Explained: What, How, Why, When 60/88
15 Oct 2022 Project-based team model for one-off and pilot software development projects 60/874
03 Oct 2020 Outsourcing Your MVP Development - Streamlined Solutions for future 60/484
31 Oct 2025 The True ROI of Software Development Outsourcing for Tech Startups 55/133
02 May 2022 What Is RAID in Project Management? (With Pros and Cons) 55/883
16 Dec 2021 Why outsource Python development of your project? 52/544
01 Apr 2021 IT Outsourcing to vietnam: Why It Is A Good Choice? 51/347
16 Feb 2026 Education App Development Cost in 2026: Benchmarks and Key Cost Drivers 51/88
10 May 2021 Project Audit and Second Opinion Services 50/294
19 Mar 2021 Selective Outsourcing of IT Functions - a new trend in business outsourcing 50/600
09 Jan 2021 How can outsourcing enable business agility? 49/239
10 May 2021 What are things you should look for in a good IT outsourcing company? 48/486
03 Nov 2022 Top questions and answers you must know before ask for software outsourcing 48/331
04 Apr 2024 Unlock Vietnamese-Japanese outsourcing potential 48/279
01 Jan 2023 Software Development Outsourcing Trends to Watch Out for in 2023 47/367
13 Oct 2021 Why Outsourcing Software Development Services Is Gaining Traction With Non-Technical Leaders? 47/359
14 Dec 2021 The Top 10 Problems with Outsourcing Implementation and How to Solve Them 47/443
12 Jan 2023 Top 10 Trustworthy IT Outsourcing Companies in Vietnam 46/326
03 Jan 2023 IT Outsourcing Costs: Is outsourcing really cost-effective? 46/254
28 Oct 2022 Expect the unexpected in 2023 - How Outsourcing Can Help? 45/248
05 Aug 2025 Why Doesn’t South Korea Outsource Its IT Projects Like Other Developed Countries? 44/139
01 Jun 2025 10 Sustainable & Unique IT Outsourcing Companies in Vietnam 43/120
15 Aug 2021 TIGO Rate Formula - Things the partners should know 43/550
01 Sep 2019 Outsourcing Software To Vietnam: Facts, benefits and limitations 43/499
21 Oct 2025 Cloud-Native Development: Why It’s the Future of Enterprise IT 43/126
17 Jan 2024 What are the benefits and challenges of using multi-sourcing or single-sourcing strategies? 42/237
02 May 2021 Outsourcing Software Development: Avoid 8 Mistakes 41/163
01 Feb 2024 How long does it take to develop software? 41/249
08 Aug 2021 Why Nearshore Software Development is better than In-House Development? 40/232
12 Oct 2021 Vietnam outsourcing path - the silk road connecting ASEAN with the developed countries (EU, US, Japan...) 40/359
03 Nov 2021 7 phases of Odoo Implementation and Development: Can they be outsourced? 40/456
02 Mar 2021 Estimate the Cost of Software Development 38/389
07 Nov 2024 Outsourcing Crisis Looming: Will Trump's Policies Transform the Global IT Landscape? 38/219
04 Jan 2021 VIETNAM AS A BIG ATTRACTIVE DESTINATION IN THE FIELD OF OUTSOURCING 38/353
01 Jan 2023 Why is Vietnam the Top IT Outsourcing Destination of 2023? 37/274
01 Jan 2024 Tech Partnerships: Choosing the Right Software Outsourcing Firm in Vietnam 37/208
01 Jan 2023 Top 5 IT outsourcing countries in 2023 37/310
15 Nov 2023 IT Staff Augmentation Types and the Best Choice for Your Business 37/232
11 Mar 2023 Common Pain Points in Software Development Outsourcing 36/293
22 Mar 2022 8 Mistakes Marketing Agencies or Consulting Firms Make When Outsourcing Web Development 36/380
17 Oct 2020 How Outsourcing can Improve Time Management for Better Business 35/311
13 Jan 2023 What are the Hourly Rates in Offshore Software Development? 35/272
01 Oct 2022 Vietnam is a favorite supply of IT outsourcing services to Japan 34/269
01 Jan 2024 12 reasons for software development outsourcing 33/217
01 Jan 2024 Software Outsourcing Questions for 2024 33/182
01 Jan 2024 Hiring Tech Talents in Asia: An Overview of Skills, Costs, and Potential 33/191
01 May 2023 Streamline Your Business with Outsourcing 32/233
06 Oct 2021 Intellectual property issues with outsourcing software development 31/416
02 Nov 2023 What are the pros and cons of iIT outsourcing? 30/219
25 Sep 2025 A Practical Guide to Secure Online Work for Outsourced Teams 30/122
21 Aug 2022 Forbes: IT Outsourcing Hotspot: Vietnam, A Small But Mighty Powerhouse 30/284
16 Mar 2021 Outsource Data Engineering Services - TIGO Streamlined Solutions 29/282
01 Feb 2023 [InfoWorld] Is your outsourcer agile enough? 28/220
08 Feb 2022 Software Development: Fixed Cost or Opportunity Cost? 27/488
25 Nov 2021 Low-Cost Software Development: Buy Nice or Buy Twice? 27/368
01 Jan 2024 What The World Is Flat Means to IT Outsourcing 25/191
08 Jan 2024 Outsourcing on an As-Needed Basis 23/182
31 Dec 2021 Outsourcing Software Development to mitigate the impact of COVID-19 22/345
21 Oct 2022 Outsourcing Billable Rate 21/286

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}