Fixed Price Projects or Managed Resource Team

Fixed Price Projects or Managed Resource Team

Every project is unique with different timelines, budgets, and resources. Different companies also have various engagement models with multiple pricing scales.

With all of the variables, it can be overwhelming to choose the correct engagement model to ensure your project runs on time, within budget, and with high quality.

At Niteco, we have two main engagement models: Fixed Price versus Managed Resource.

But what are the differences? When is it beneficial to choose one over the other?

Let’s keep things simple.

Fixed price projects are projects in which scope of work and budget are pre-determined before the work actually begins.

Managed resource projects, on the other hand, are dedicated teams ready to commit full-time to your project.

Do you know exactly what you want? Do you have all of the requirements, timelines and specs for your project? Most importantly, do you already have a set budget for this project? If so, then go with fixed priced project.

Think about it like this:

Do you know exactly what you want? Do you have all of the requirements, timelines and specs for your project? Most importantly, do you already have a set budget for this project?

If so, then go with fixed priced project. You will know exactly what can be achieved in the amount of time determined.

Fixed price projects require a lot of client participation at the beginning, but tend to be less flexible. Because everything is set on a tight deadline, there is little room for error or change, and ultimately the projects end up being less creative. With fixed price, quality can be compromised for time.

Do you have more flexibility and time? Go with a managed resource project.

With this engagement model, you have flexibility to adjust the project as needed. We use the sprint and agile methodology. Every two weeks we sent a sprint with goals, and come back together to realign goals. Points of pivot can be readily made here.

Managed resource projects are really good for maintenance projects if you already have a system in place. If for example, you already have a payroll system with clients in the system, you need a need to make sure system is running smoothly. Dedicated teams will ensure your system is running smoothly and contribute add-on features as necessary.

Do you have more flexibility and time? Go with a managed resource project.

One of the benefits of MRP is that because it’s a longer term project, there is a closer relationship between the two teams. They have a good knowledge of the system and develop the project further and thus allows more room for creativity.

Are you unsure about which to choose, or what is right for your project?

You can do both. Test the fixed price model for small projects, then move over to managed resource for bigger projects. That way, you have less risk involved with the first project, and you’ve allowed the teams to build their working relationships already. That way, when you move onto a MRP, the process for communication and workflows will have already been established.

These engagement models don’t have to be complicated. We find that it’s best to keep things as simple as possible — and these two models can be adapted to each project scope of our customers

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Niteco

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