According to him, the fixed price approach works well when the flow of tasks is unstable and periods
Posted: Sun Jan 26, 2025 6:25 am
Stanislav Shilov, Director of Product Development at the Center for Digital Business Solutions at BSS, believes that the figures and trends cited are the result of manipulation. "In fact, the choice of a custom development option - fixed price or time&material - is dictated not by a hypothetical interest or desire, but by quite canada mobile number database ractical factors: the volume of tasks, the dynamics and uniformity of their distribution over time, and finally, simply the organizational specifics of the customer. For example, customers who are subject to formal procurement procedures - for example, within the framework of Federal Law 223 - are essentially forced to carry out custom development at a fixed price, due to the specifics of the legal requirements," he explained.
of activity alternate with periods of calm - in this case, the customer pays for exactly the resource that he used, and does not bear expenses during periods of downtime. "Also, when working on a fixed price, the customer can shift a significant part of the work on setting the task to the shoulders of the contractor - for example, limiting himself only to high-level wishes and including business analysis in the project scope. The downside is that in the case of fixed price development, the customer is more dependent on the contractor's capabilities to provide him with resources at the moment of their demand. This is the main difference from time & material, where the customer can clearly assess the resource available to him and the possibility of his completing the tasks by the required deadline," Stanislav Shilov noted.
He said that he does not see a stable trend in the transition to one or another type of development. "In our experience, each customer chooses a custom development format based on needs and capabilities - and then adheres to it. A change in format may occur if the situation within the customer has changed significantly - for example, budget cuts do not allow for the work of a full-fledged team for time & material, or vice versa - a large flow of development tasks makes it rational to allocate a team," concluded Stanislav Shilov.
Petr Levin, Director of Software Development at IT_One, said that in 2022-2023, the number of customers in the custom development area decreased, as many left the Russian market. "Among those who remained, there really was a trend of transition from time & material development to fixed price. This is due to the fact that everyone is forced to save money, and a fixed price for a project makes it possible to reduce the investment burden without losing efficiency. Fixed price makes it possible to get what you need at a predictable price," he explained.
of activity alternate with periods of calm - in this case, the customer pays for exactly the resource that he used, and does not bear expenses during periods of downtime. "Also, when working on a fixed price, the customer can shift a significant part of the work on setting the task to the shoulders of the contractor - for example, limiting himself only to high-level wishes and including business analysis in the project scope. The downside is that in the case of fixed price development, the customer is more dependent on the contractor's capabilities to provide him with resources at the moment of their demand. This is the main difference from time & material, where the customer can clearly assess the resource available to him and the possibility of his completing the tasks by the required deadline," Stanislav Shilov noted.
He said that he does not see a stable trend in the transition to one or another type of development. "In our experience, each customer chooses a custom development format based on needs and capabilities - and then adheres to it. A change in format may occur if the situation within the customer has changed significantly - for example, budget cuts do not allow for the work of a full-fledged team for time & material, or vice versa - a large flow of development tasks makes it rational to allocate a team," concluded Stanislav Shilov.
Petr Levin, Director of Software Development at IT_One, said that in 2022-2023, the number of customers in the custom development area decreased, as many left the Russian market. "Among those who remained, there really was a trend of transition from time & material development to fixed price. This is due to the fact that everyone is forced to save money, and a fixed price for a project makes it possible to reduce the investment burden without losing efficiency. Fixed price makes it possible to get what you need at a predictable price," he explained.