Initially, there was a tendency toward using a fixed-price model in outsourcing agreements. However, several different business models have emerged and are widely utilized, one of which is known as the Time and Materials contract (or T&M contract). Choosing the proper pricing contract can be a daunting task since it must be aligned with your company’s operating processes, requirements, and objectives, along with overhead costs borne by the vendor.
T&M and Fixed price are considered two dominant choices, and both have their different advantages and disadvantages. However, in today’s article, Sosene primarily focus on the T&M model and the main difference between these two models.