Models in mobile app development pricing

Here's a brief introduction to two ways to handle billing in software development. The choice depends on many factors such as the scope of work, size of the project, requirements. Find out what are the models in mobile app development pricing to see which one would be better for your project.

It’s very important to know, as a client, different forms of contracts and pricing models. That’s how you can find out which suits you. Remember though, that mobile app development company is always there to help you make these decisions. The team can explain how the contract works and why a particular form of it is the best option. 

Agencies generally have their templates of contract and the scope of work, but every project is taken individually. Each time, the contractor adapts the activities to the project specifications.

In this article I’ll give you a description of a fixed price model and time and materials model. 

Fixed Price contracts in software development

As the name suggests, in this model the price is fixed at the beginning. As a client, you’re billed for the entire project in advance. However, the price can be paid in parts as well as after finishing the project. It’s not important how much time each team member spends on a particular activity. In this model the timeline of the project is determined by the budget. The team has to deliver the project in the agreed sum. It’s a good choice for projects in which it’s rather easy to predict the requirements and timeframes.

BUT imagine a situation where you and the contractor choose this model for your mobile app development and during the process you decide to change something in your app. Imagine how hard it is to fit the requirements in budget frames if something unpredicted happens, also on the app creator’s side. 

The development team will have no chance to propose changes and improvements during the project because it’s not compliant with the fixed price contract. This can apply to really small things, like buttons and content in the app. That’s why when choosing the Fixed Price model, it doesn’t really mean that you can feel more safe about the budget than in the T&M model. Sometimes it may occur that you’ll want to change something in the app specifications and it will require signing a new contract.

Conclusion

In software development, it’s not very easy to determine the specific deadline of the project and the requirements tend to change. These aren’t small projects with easy-to-foresee actions during implementation. The project management is responsible for making sure that all the requirements are fulfilled and the client is satisfied.

The fact is that the time and cost should be flexible in order to make it a fit-for-purpose solution and in order to deliver a satisfying service.  A fixed price contract might be ok for MVPs and other small projects as long as it’s possible to set all the specifications at the beginning very precisely. In these cases it’s rather easy to control the process.

Best fit for your needs thanks to time and materials contract

The time and materials model is totally different — just the opposite. The costs are dependent on evolving conditions and requirements. This actually means that as a client you pay hourly rates and for the costs of materials. It’s a model for flexible projects — it allows the team to adjust to all the requirements. 

Whenever you decide to make a change in app features, this is included in the time and material plan and executed flexibly. The team has a chance to adapt fully to the new ideas and has time to present and implement their suggestions. It’s the best option for long-term projects when the scope is not rigidly fixed. 

Briefly, if you want the flexibility to modify the scope of the project, this time and materials contract is definitely better. 

T&M for better software products

Time and material contracts allow developers to adapt to the client's needs and thoroughly check the application with regard to quality assurance at each stage of the project. In turn, this allows the client to make the necessary changes when needed instead of at the end of the project. This ensures a polished and error-free product. 

Why we work in the time and materials method 

We do not agree with doing projects on a fixed price model. We always try to explain to our clients that the T&M model is simply better for software development projects because of its flexibility. This is also closely related to our agile development approach. 

It's not like buying a T-shirt or a washing machine. The Fixed Price model greatly limits the team's possibilities, limits the manipulation of the project scope, which can be and usually is variable. 

It's not about opening the way for us to pump up the price. It's about being able to easily and flexibly reprioritise, change features and move on with the project without focusing on paperwork. But still you should know different models in mobile app development pricing to be aware of possibilities in different projects.

This solution allows us to divide the project into smaller tasks. At the beginning of a project it is very difficult to predict what will happen at each stage. We always want to be able to adapt to the needs of our clients in order to deliver a product that they will be satisfied with. 

Find out why we think that story points estimates are better than hour estimates here.