Engaging with ASG
Contractually, there are typically two main pricing models used at ASG;
- Fixed Price
- Or Time and Materials (T&M)
Each model has its purpose and advantages, we will work with a client to figure out which is the most appropriate for a particular project.
Fixed Price Contract
A fixed price contract involves an agreement that explicitly defines the services and deliverables to be provided along with a set price for the entire project or phase of the project.
Many people select a fixed price because it is:
- Predictable. With a fixed budget, clear requirements, deliverables and set deadlines—there should be few surprises.
- Manageable. Invoices based on progress via hours completed or the percentage of work completed, should require little administrative oversight so a client can focus more on the technical aspects of a project.
- Design to Budget. Often there are design decisions or trade-offs which must be made to keep a solution within a viable budget.
- Budget-friendly. Knowing the cost ahead of time makes it much easier to stick to set budgets.
- Setting and Meeting Expectations. Defining and negotiating tasks beforehand, based on budget impact and defining the acceptance criteria will result in delivering well-done projects.
A fixed price project must have a fixed, well-documented scope of work to be successful. Larger projects may take weeks to become a well-defined with a preliminary design effort. Often clients engage ASG through a T&M phase first so that we may participate in the early design and definition of the scope of work.
Risk – Expect the Unexpected: Even the best developers may not capture all the features and functionality that may be required for a useful application. As software takes shape, and potential users start to walkthrough the workflow of an application, new ideas, features and functions will be identified. This out of scope work is typically added to a punch list that prioritizes the tasks into “must-haves” and “wish-list” items. The out of scope work should be deferred to a later phase or added via an engineering change order and contract pricing should be adjusted.
Note that there is often a premium assigned to fixed-price contracts depending on the amount of risk or ambiguity in the scope of work.
Time & Materials Contract
T&M contracts involve billing clients for exactly the actual hours incurred on the project. With a T&M contract, a client is billed a set hourly rate for all labor along with the costs of materials such as hardware, software licenses and/or travel expenses if applicable.
The main advantage of T&M is that work typically begins right away. Our engineer may be working on-site, side by side with a client and providing tasks as directed. They may also be working in conjunction with a clients’ team, instead of being solely responsible for a certain task. Other advantages include:
- Flexibility. A T&M contract presents the opportunity to change things as you go, which helps those clients who are still defining or polishing the concept of their application.
- Agile Development. Daily scrums allow software development teams to complete many segments of a project one step at a time, it is an iterative approach which allows a client to be very involved in the development process and to change direction as needed.
- Hands- on Management. You can see exactly how much time is spent on each task, which can help motivate the team to work as efficiently as possible. The impact of any unforeseen risks are mitigated quickly or shared as the development path is taken together.
We like to further break T&M into two categories:
- Client-Managed T&M
- ASG-Managed T&M
A Client-Managed T&M contract is when an ASG resource works as a subcontractor to an existing project or as part of a client’s staff. The scope of work and task allocations for that resource are managed by the client and ASG simply makes the resource available to the client for the duration of the T&M contract. The ASG resource follows the QA policies and procedures of the client.
ASG-managed T&M is a SERVICE that ASG provides some of its clients who do not have an in-depth understanding of software or perhaps the system in which the software must operate. Under these conditions it’s especially important for an experienced project manager to help lead the project to its natural end point. The ASG project manager works closely with the client to provide timely status, issue resolution, documentation, visible deliverables and whatever else is needed to keep the project on track.
There is always a budget, whether we are estimating to a set of requirements or giving a rough order of magnitude (ROM) based on previous experience. For more information on the art and science of estimating, read our blog post regarding the cone of uncertainty and the history of the cone in software engineering.
All other questions, contact us.