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2 Types of Software Development Contracts

TIME & MATERIALS VS FIXED PRICE Many companies specialize in only one type of pricing, to avoid the downsides of the alternative type; likewise, many organiza- tions seeking professional services specify that they prefer one type of billing over the other. Which is the better contract type? IDEA The idea is not The idea is clearly formed and articulated and there requires further formalization. are steps for its implementation. SCOPE If a project is bigger than a landing page and, then It is preferable to sign a fixed contract if the project isn't large and clearly defined. time and materials contracting may suit. RISK The risk is reduced by the flexibility of the contract which allows greater level of testing the project assumptions. Higher risks are shifted onto the founder on a way of bigger financial commitments. FLEXIBILITY Technical scope of a project is defined prior to the start of The need for greater experimentation leads to greater flexibility. development process which results in less level of flexibility. APPROACH Fixed price contracts by their very nature place the client and the supplier against each other. Contractor and founder work together, 'co-own'a project and reinforce each other. TIME & MATERIALS FIXED PRICE TEAM www.youteam.co.uk

2 Types of Software Development Contracts

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Many software development companies focus on one type of contract over the other, to avoid the downsides of the alternative type. Some organisations seeking professional services specify that they pre...

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