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Project-based Outsourcing

The project-based approach is considered the most appropriate option for companies with irregular, one-off, and pilot projects of low to medium complexity with well-defined requirements and deliverables.

Auriga’s experience shows that many of these projects turn into mutually beneficial and long-lasting relationships in the form of a dedicated development center, for instance. That is real proof of how much attention Auriga pays to project delivery quality, ensuring that they are always delivered on time, within budget, and according to specifications.

Pricing Models

Auriga delivers project-based software development services according to the following pricing models:

  • Fixed Price (FP)

Auriga’s FP model offers customers a low-risk option. This model is used when the scope and requirements of the project are well defined and documented. The FP model provides for on-time, on-budget delivery of the project, and deliverables, costs, and deadlines are clearly spelled out.

The customer pays a fixed price for the complete project, the cost of which has been estimated based on the specifications provided by the customer. Within the frame of such projects, we use a phased approach that includes scoping, development, implementation, and support.

  • Time and Material (T&M) Model

The T&M model is an attractive option in cases when scope, specification, and implementation requirements cannot be clearly defined at the beginning of the project. Under this model, the customer pays the agreed hourly price for the efforts of the developers and project managers.

For this engagement model, Auriga builds project teams and provides equipment and infrastructure in accordance with project requirements. The model offers enough flexibility to balance team size and project workloads—and, consequently, the budget.

  • Hybrid (FP+T&M)

The hybrid model combines the FP and T&M models such that well-defined requirements are implemented based on the FP approach, and the requirements that were unknown at the beginning of the project or that come up during the initial phases are implemented subsequently based on the T&M pricing model.

This hybrid model allows both sides to mitigate their risks and provides more visibility into costs.

  • Risk and Reward

The Risk and Reward engagement model is an enhancement of the traditional FP model. In addition to the contracted fixed price, the customer pays us an agreed reward if Auriga’s team exceeds the agreed milestones, and correspondingly, Auriga accepts a reduced fee if the milestones are not met.

  • Agile Fixed Price (AFP)

The scope is broken into short user stories, typical for Agile methodologies. When completing each story, the provider is paid the price based on the story size determined during the planning session, regardless of the actual effort required. Stories that were not accepted by the client remain unpaid until completed. This model transfers the risk of underestimating the work at a story level from the client to the provider, provides incentives for the provider to work faster, and thus is seen as a welcome improvement to the basic T&M approach by some clients.

Relevant Cases