We are happy to offer time and materials and fixed price proposals, although both approaches are not always well suited to every client.
For some clients, the traditional time and materials contract is the best option. Whereas a fixed price contract will require some premium to be added (typically 10% to 15%) to accommodate the extra risk transferred to the supplier, this is not the case with time and materials. T&M will also suit clients that wish to adopt a blended approach, using their own internal resource alongside our own.
Whether fixed price or T&M, our projects follow a four stage approach, which we have designed to incorporate the best of traditional methodologies whilst not burdening the project with unnecessary administration. This enables us to deliver projects according to an agreed project plan at a cost that is sometimes 45% lower than many of the larger ERP consultancies.
Some clients prefer a fixed cost engagement. This enables clients to know what the implementation will cost and essentially transfer the risk of over run to us. Fixed price may prove to be more expensive than a T&M arrangement, particularly where the project goes smoothly or where the client takes a close interest in the management of resources.
We are generally happy to offer a fixed price proposal based on our methodology as follows.
The planning stage stays the same. This will represent between 5% and 10% of the overall project cost and will enable us to prepare a detailed project plan and costing for the project. Based on this, we will offer a fixed price proposal for the remaining three stages of the project. So, for example, a typical project might involve an initial planning stage of, say £50,000, which would lead to a fixed price proposal in the region of £450,000.
The fixed price proposal will be based on the project plan and will stipulate in detail the work to be carried out by both sides and the timescales for completion of this work. If our work over runs, then we will absorb the extra cost. If the client’s assigned tasks over run, then this may involve extra costs and these would be added to the fixed price.