Fixed Bid vs. Dedicated Team: Pros and Cons
Softjourn

Fixed Bid vs. Dedicated Team

Which Engagement Model is Right for You?

July 30, 2019 by Softjourn


Using remote software development services can offer companies a host of benefits, including reduced costs, team flexibility, increased efficiency, reduced risk, and a competitive advantage. However, a crucial part of leveraging those services to your advantage is choosing the correct engagement model.

We at Softjourn often get asked which model is the right one, and as you’ve likely heard before, it depends on your needs. We’ve created a helpful guide to help you determine the model that is most appropriate for your company: the Fixed Bid Model or the Dedicated Team Model. Read on for information on these models, and gain insight on the pros and cons of each from the developer’s perspective.

Fixed Bid Model

We recommend this model if:

  • You have a clear project scope defined, including clear objectives, workflows, and outcomes;
  • You are working with a new vendor (a pilot project is always a good idea and often can be completed as a fixed bid engagement);
  • You have a stable set of requirements that will change very little, if at all.

Detailed requirements are extremely important for this model. Changes to the scope of the project could require re-negotiation with the service provider. Also remember, any change may delay the delivery, so the scope needs to be tightly monitored.

In the event of changes, the development team discusses them with the client, determining if they affect the deadline, how important they are for the current release of the product, etc. If the client wants to add the change into the current scope – but still meet the initial deadline – we will assess if other features can be adjusted in order to meet the deadline.

Dedicated Team Model

We recommend this model if:

  • The current development plan requires additional resources for long-term strategic software development or different technologies;
  • Initial requirements and objectives are unclear, i.e. the end results aren’t solidified, such as in a start-up, for example;
  • You know there will be frequent scope changes;
  • There is a strong possibility of priority changes.

In this model, project management is in the hands of the client. Your team, your plan, no re-negotiation of scope. If you need to make changes to the plan, you can re-assign tasks.
In this model, the service company provides recruiting, infrastructure, and administrative support for your team. It also works with you to monitor performance and ensure you have the right people on your team.

That team serves as the remote extension of an in-house team. It reports to the client company, following its corporate culture and policies, development methodologies and practices, technical platform, workflow tools, and management style.

Fixed Bid vs. Dedicated Team: The Developers’ Perspective

Because they are such a crucial part of the process, we wanted to provide some perspective from the developers’ point-of-view about the different types of engagement models. Several of Softjourn’s experienced and talented developers, who have been with us for more than five years, offered their thoughts on the pros and cons of each model.

Pros of Dedicated Teams

  • Stability: Some developers like to know what they will be working on in the next weeks or months.
  • Deeper knowledge: A dedicated team model lets a developer take a deep dive into the project technologies. Having to support what the client develop gives us a different perspective on the architecture, scalability, etc., as well as on the output of all team members, both in-house and remote.
  • Frequent communication: Staying in touch with the client, often on a daily basis, improves the communication skills of the team members. It also bolsters the mutual understanding between the client and the team.
  • Possibility of onsite work: Working closer with the client encourages more familiarity with how they work and who is working there.
  • Relationship building: Comradery with fellow team members, both co-located and those working at the client site, is a definite “plus” when the rest of the day involving writing code.

Cons of Dedicated Teams

  • Day-to-day maintenance: For many developers, maintenance is a less-interesting part of the job.For example, one of Softjourn’s dedicated teams spends up to 20 percent of their time supporting different products, which can be less engaging than other tasks.
  • Adapting to client processes: Because every dedicated team is a company within a company, the team follows the client’s lead. Sometimes, these processes differ from those we have at Softjourn and require adjustments.
  • Freedom: Dedicated teams usually get light specs for any new features or projects they are working on, giving them the freedom to suggest solutions. Of course, we always review the solution with the client’s product owner before development.

Pros of Fixed Bid Projects

  • Change: Every new project brings new technologies and skills. Deadlines also challenge developers to test their abilities.
  • Clearly defined specs: Developers gain a better vision of the product overall.
  • Technology input: Service providers often have an opportunity to suggest the technology solution for new products, as well as the architecture, tools to be used, and other factors.
  • Scope input: Developers are usually involved in breaking down the project into separate tasks, even as early as the estimation phase.

Cons of Fixed Bid Projects

  • Communication: Developers don’t often communicate directly with clients in this model.
  • Usually, product owners are responsible for that task. This lets developers focus on development but can exclude them from daily communication and scope questions.

So there you have it! These guidelines and developer insights have given you a starting point for deciding how to choose a remote software development model for your company. If you are not sure on the model that best fits your needs, we are here to help. Softjourn is ready to guide you through the rest of the decision-making process. Contact us today!


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Softjourn is a global technology services provider that finds custom solutions for our clients’ toughest challenges. We leverage our domain expertise in Fintech, Cards & Payments, and Media & Entertainment (with a special emphasis on ticketing), to apply new technology that brings our clients' growing needs to life. Contact us to discuss how we can make your idea a reality!