Time&Material Agreement in App Development — How to Start?

Often a model of agreement that we choose to sign with a software house has a significant impact on the quality of a final product. In the case of app development, a good solution is a Time and Material model. Why? What are the rules of T&M agreement? Find out how to prepare for that kind of cooperation to get the most of it.

Time&Material is a cooperation model in which a client pays the contractor for a final number of working hours multiplied by a previously established hourly (or daily) rate.

The agreement provides a high level of flexibility in case of the changing scope of the project. That kind of settlement is cost-effective especially for big projects, when the amount of work is hard to determine, project requirements are changing during the process, or both. That is why Time and Material is a model that works perfectly for mobile app development. What is more, it fits great with the Agile methodology.

Agile Methodology presupposes creating a team composed of representatives of client and contractor. The client has full and constant control over the shape of the application. He is also engaged in work planning. Then, work divides into one- or two-week intervals called sprints. Before every sprint, there’s a meeting (the client is present) where the team plans the scope of next sprint and summarises the previous one. After every sprint, there’s a demo when the team presents functionalities client can test. Time and Material agreement in its definition implies transparency, client participation in the project and flexibility. Therefore, it fits perfectly with Agile.

Time and Material agreement connects with getting dedicated, experienced team to your project. You all focus on the same goal — delivering the product of the best quality, as fast as possible. What is more, you cooperate in terms of a partnership. With the help of developers, you can prioritize functionalities and adapt the shape of the project to requirements that change with time. Therefore, as first you can choose these functionalities, that bring the most value to your business. You can easily and quickly obtain a Minimum Viable Product (MVP) to get valuable feedback from initial users.

Time and Material deal assumes that a software house presentsthe progress in the project systematically. That allows making quick and flexible decisions in terms of further development. The model makes the development faster. Project management is more ordered, you also start sooner. There is no need to write detailed specifications in advance, and less time is spent on paperwork. You work on details along the way.

In Time and Material agreement, you pay for actually executed work. And you pay less. A software development company doesn’t add any safety premiums in case of future problems. Time&Material also means less risk. The model requires large transparency from a software house. You track the progress, know precisely at which point the team is. That way you obtain a product that is so elaborated that creates less risk while entering the market as something new.

Imagine yourself, that you established detailed specifications and project scope with your software development company in advance. Then, on the meeting with your potential clients, it turns out, that you need to change your app. With Time&Material deal you don’t have to waste time on negotiations, rewriting the agreement and calculating the cost of every change — your deal is flexible, so as your development team. If you need any change, it will be done without any formalities. You just have to tell the development team that you want to include additional functionality or simplify some process, and it will be done.

How to Prepare to the Development with Time and Material Deal?

• Before the project kicks off, establish a satisfying price per hour or per day, that will appear in the agreement with your outsourcing partner. Not every person involved with the project should get paid with a price per day stake, partial roles, like supervisory or supporting, can be accounted for an hourly price.
• Select a person in your company that will be responsible for this project and will be in constant communication with an app development company. That person will follow the progress, assess the effects, give feedback, settle functionalities that will be added to the product in successive sprints. Of course, you can be that person (especially if you want to establish a startup company based on that app development).
• Establish rules on project management with your outsourcing partner. What tools will you use to communicate? How long will the sprints be? For instance, at Appstronauts we use Slack for communication and Jira for tracking the progress.

After you start:

• Remember to be transparent and engage in the project. That is the essence of the partnership in terms of Time and Material agreement. You, as a client, verify the progress and set priorities, and development team systematically informs you about the status.
• Trust your partner. Many people are afraid of cooperation in terms of Time and Material agreement because it gives a software development company room for malpractice. The truth is that outsourcing partner cares about making a good impression on you and delivering the best product fast. A software house that cheats its clients loses them quickly. Although it’s worth to pay attention, become familiar with references and select the app development company that provides high-quality services.