The time and material business model is perfect choice for short or middle term projects, where the total effort cannot be estimated in advance or the scope of work can be changed during the project implementation. It is also ideal for clients that need research work or to extend an already operational team. The time and material may be used as a transition step to establishing a dedicated team for long term projects.
Time and Material Model
The time and material advantages:
Flexible and negotiable budget and low risk for both parties
Development process starts earlier, since there is no need in formulating the final requirements
Client has control over the project, approves or adds any task that will be implemented on demand
This is an effort based model with costs is being calculated using the following formula