IT Outsourcing
In a today’s very competitive world, most of companies outsource at least some of their IT work – just to become more effective from Management Point of view as well as from cost point of view. This work lot better for small companies as they can know their cost well in advance at the same time, this will work with big companies as well since they can use their resources for strategic work.
One of the primary goals of outsourcing has always been cost effectiveness. As outsourcing is increasingly becoming complex, a single pricing model is no longer realistic. Therefore, at Avirtel we designed the following options where client can pick and choose between the pricing models which suit their organization’s specific budget and cash flow requirements:
1. Fixed price
A fixed price model is the most common model, in which the price for the project is decided at the start between client and Avirtel. It is an ideal pricing model for projects which have clear scope, objectives and a stable set of requirements.
2. Time and materials
Time and material model as the name suggests, is based on the time and material used in completion of the project. It is typically used in application development and maintenance projects which have long time duration and is ideal in the following scenarios:
- The project scope and specifications cannot be effectively estimated at that particular period of time
- For maintenance and support based projects
- In a dynamic environment where needs evolve at a rapid pace
Avirtel may agree with client upon either a monthly rate (on an hourly basis) for the resources engaged in the project. The rate will be based upon the skills and experience of the resources utilized and also includes any non-standard hardware or software required for the project.
This model gives greater flexibility to the outsourcer in terms of modifying project specs based upon changing business needs and scenarios.
3. Incentive-Based
This is a hybrid model often used in conjunction with the traditional models like Fixed price or Time and Material. In incentive based model, client includes some bonus or incentive when Avirtel achieves some key metrics which can add value to his business such as early completion, delivery exceeding service levels specified in the contract etc.
4. Pay as you use/Pay per unit
This pricing model Avirtel offers is a unit–based set rate and client pays for the service as per his consumption.
This is best for businesses which have variable demand based work and require frequent scaling up or down of resources. For example, a client may outsource maintenance services to Avirtel, where we bill client based on the number of units consumed to complete the project.