Advantages of Time & Material contracts

This article discusses the main benefits when hiring consultants on Time and Material contracts, for use either locally on-site or via our Nearshoring centres in Poland.

ProData Consult's core business is the delivery of consultants on a Time & Material basis. One of the things that are often unclear for many companies is how Time & Material contracts can be an advantage.

We discuss four of the main advantages:

  • Why do Time and Material contracts give flexibility?
  • Why is agility a vital factor?
  • What do IT specialists prefer?
  • How can you keep control of expenses?
Illustration - circle in 4 sections: Gives Flexibility Requires agility Specialist's choice Budget Control

Gives flexibility

The most significant advantage of time and material contracts is undoubtedly the flexibility it carries.

Time and material contracts are simple to make and to extend, but also easy to end. That makes it possible to quickly or efficiently scale up and down in resources as needs and demand change.

And, precisely, the ability to scale up and down in resources efficiently and flexibly is vital for many modern companies – especially for IT-centric companies. Furthermore, time and material contracts are flexible, where you can either have resources added full-time, part-time or just for a few hours. It all depends on your needs.

Time and Material contracts characteristics:

  • Simple to extend and terminate
  • Easy to scale-up or scale-down
  • Provide access to extra resources
Senior manager with laptop keeping control of IT contracts

{  ... In the process of bringing a consultant on board, the simple time-based contract terms make it possible to get resources quickly.   }

Requires agility

In a development organization dealing with change and the ability to change direction is a vital factor.

Agility has become a more prominent competitive parameter than ever before. The need to flexibly adjust your “start-position” may be necessary to meet customer and market demand. It is a need that can happen overnight when you need to act quickly to keep the flow in development. Time-based contracts both require and give that readiness and agility.

In the process of bringing a consultant on board, the simple time-based contract terms make it possible to get resources quickly, so development and progress do not stop.

However, a fixed-price agreement involves a lot of time to define a scope that can then be a starting point for a price. Furthermore, fixed-price contracts often reduce flexibility and the ability to handle change, as changes in project scope require that you revisit the original agreement.

The preferred choice of specialists

The “Gig-economy” is indeed upon us – especially regarding the IT industry. There is a growing trend amongst specialists to seek out project-oriented work.

Hourly contracts are the preferred choice and the industry standard. So, if you want your hands on the sharpest IT professionals, then time and material contracts are inevitable.

3 people in a contract meeting one holding a It consultant contract ready to sign

The traditional employer-employee relationship is under pressure. Increasingly, many  IT professionals will seek the path of independence, and Time and Material contract will be a choice for many IT professionals.

Remember to keep an eye on the budget

Compared to fixed-price agreements, it is clear that with hourly contracts, you do not get a specific solution or service for a certain amount of money.

Therefore, you need to keep track of progress and the hourly consumption – as always – to ensure you get the desired value from the consultant. With ProData Consult's online client module, it is easy to achieve full control and overview of all consultants.

A tight budget control ensures you keep your budgets, so it does not get out of hand.

Need more information on Time and Material contracts? Download our free ebook: How IT executives can leverage external IT consultants

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