As a Sales Specialist with four years of experience, I ensure that every prospective client feels comfortable in the software development world - regardless of their background (technical or not). I focus on communication, clarity, honesty and long-term collaboration. Apart from taking care of due compliance, legal and negotiating contracts, I ensure that engaging in a software outsourcing process is a positive experience for both parties.

Alina Turek

\[TOC\]

When we think of web app development frameworks, there are a handful that spring to mind before Ruby on Rails. But actually, the whole world of web development would not be the same without **Ruby on Rails**.

Despite being initially released all the way back in 2004 (making it 18 years old at the time of writing), Ruby on Rails finds itself consistently in the top 10 web apps, which means that Ruby on Rails development services are still in high demand across a wide range of areas.

So, **Ruby** might not be one of the most well-known programming languages but it certainly is one of the most well-used, and there is a lot to be said for the people who use it on Rails.

Using Ruby on Rails could be what you need to take your web app to the next level so stay tuned as we find out how to find and **hire Ruby on Rails programmers**. They might prove to be the most valuable outsourced employees you’ve hired in a long time!

<Baner name={ror} />

## Why should I use Ruby on Rails?

Not only is Ruby one of the best programming languages with a whole heap of benefits, but the Rails framework compliments it perfectly making for an awesome team. Here are just a few of the key advantages you can expect to enjoy if you decide to use it for your next software development project:

1. **Cost-effective:** Ruby on Rails is one of the most efficient ways to develop web applications which makes it low on cost. Think about it: you’ll have to hire fewer full-time team members or outsourced web developers to get the job done because less time will be spent developing the project overall.
2. **Easy to maintain:** you can save even more money with Ruby on Rails when it comes to maintenance. Making changes, fixing bugs and just generally keeping things up to date is a really smooth process using this platform which means fewer developers will be required once again, and it makes your life a lot easier too.
3. **Solid for security:** these days, cyber security is a grave concern for a lot of people and rightfully so. However, if Ruby on Rails has been used to develop your project you’ll have little to worry about. That’s because it has a whole bunch of built-in safety features!

![Img](https://a.storyblok.com/f/86602/720x383/f9d3eb617c/what-are-the-use-cases-for-ror.jpg)

## What are the use cases for RoR?

Now that we’ve seen some of the benefits of using Ruby on Rails, it’s time to figure out which circumstances it should be used in. As we know, there is a lot of competition against Ruby on Rails such as Java, so which development processes and products are best suited for RoR?

It’s widely thought that the best use of Ruby on Rails in terms of development projects is for online stores that have advanced options for buying and shopping. That’s because it’s super versatile, which allows it to handle complicated processes and tasks with ease.

It’s also really great for social **networking sites and stock market platforms**. When you think about it, these are pretty complicated web applications to build, so if you have something in this ballpark in mind, Ruby on Rails might be the best choice for you.

Some huge brands with some amazing websites use Ruby on Rails web apps. Take a look at the websites of **Soundcloud, GitHub and Airbnb** (just to name a few) and see how great they look and how easy they are to use. These sites have been created by highly-skilled programmers, which says a lot about the status of Ruby on Rails as a whole.

<ReadMore> Read also: [Ruby On Rails Web Development](https://selleo.com/blog/ruby-on-rails-web-development) </ReadMore>

## How to hire Ruby on Rails Developers

If you’ve come this far into the article and feel like **Ruby on Rails** is for you then congratulations, you’ve made a great choice. But what’s the point in trying to teach it to your in-house developers or even hiring a full-time developer when you can outsource the work?

There are tonnes of **top-notch RoR developers** out there with years of experience. All you need to do is go out there and find them, and it could not be easier if you have the right information to go on with.

But before we show you that, let’s take a quick look at the main pros and cons of using an outsourced development team (hiring Ruby on Rails specialists) as opposed to new in-house developers:

1. **Time-saving:** if you choose to hire your own developers in-house, you probably already know it’s going to take a long time. You’ll need to interview several people, provide them with a trial task and then go through all the HR admin for those you do decide to hire. On the other hand, most of this will be done for you by an agency if you decide to outsource the work.
2. **Better on your budget:** time is money. So, saving time in this way is saving you money! On top of that, the flexible basis of hiring through an outsourced agency means you only have to keep the developers in your team for as long as you need them so when the project is up, you can let them go and not pay any more than you have to. You can even put an agency on a trial period to see if they are right for you.
3. **Higher levels of expertise:** of course, it’s possible to hire a Ruby on Rails developer with a lot of skill in-house. But once again, it requires a lot of time to make sure they are right for the task. Outsourced agencies have already done all that work with their own team, so you know you’re going to be hiring RoR developers at the top of their game.

### Where to find Ruby on Rails developers? Top websites for hiring RoR experts

![Img](https://a.storyblok.com/f/86602/720x383/5d4cf81cfd/where-to-find-ruby-on-rails-developers.jpg)

There are loads of great sites online that you can use to find the best of the best software development talent. It just depends on whether you are looking to hire an individual developer or a whole outsourced team. So, consider the scale of the project.

If it’s a single developer you’re looking for, here are some of the top sites you can use in your search:

* **Ruby on Rails Jobs:** what can be a better place to start than a job board dedicated to Ruby on Rails developers? This just goes to show how big RoR actually is. So, if you’re looking for a boutique, a specialist place to hire Rails developers, this is the place to be.
* **Toptal:** if you prefer to be a little more open with your search, or if you want to hire developers using a number of different frameworks, you might be better off using a more general software developer freelancing platform. Toptal is one of the best in the world for that right now, so go check it out!
* **GitHub Jobs:** everyone loves GitHub. It’s been around for many years and is an integral part of the tech community. But did you know they have their own job board? It’s a great place to be!

If it’s a whole team, maybe the following will be better suited to you:

* [Clutch: ](https://clutch.co/profile/selleo)if you want to ensure that an outsourcing agency is verified and of very high quality then look no further than Clutch. You’ll find all the finest companies on this site without fail.
* [Goodfirms: ](https://www.goodfirms.co/company/selleo)Goodfirms has been around for less time than Clutch but that does not mean it lacks in quality. It’s one of the fastest-growing sites of its kind and already covers over 6000 companies.
* **SoftwareWorld:** this is perhaps the biggest name on the outsourcing scene and is an automatic go-to for many companies all around the world. SoftwareWorld has one of the biggest banks of companies and excellent tools to help you find what you’re looking for.

Remember, you can always reach out directly to Selleo if you want to skip the hassle of searching. We’ve got loads of amazing RoR developers just waiting to help you out on your next project.

## Steps to take when hiring a RoR specialist

If you’re thinking about embarking on Ruby on Rails projects in the future, there are a few things you will need to consider when hiring new developers. Firstly, you’ll need to find the right developer or team. To make sure that they absolutely are right, you’ll need to interview them. We’ve put together some tips on how to do both of those things.

<Baner name={ror-landing} />

### Identify your ideal Ruby on Rails developer

Just like with any hire, there are some questions you should be asking yourself before you bring anyone to the interview stage. If you run through this checklist, you’ll save time on bringing people to interview who just aren’t right for the job.

Consider at least some of the following as you are searching for an RoR developer:

* How much experience do they have with RoR?
* Will they integrate into your team efficiently?
* How good is their communication either as an individual or as a team?
* What is their previous experience like on similar projects?
* What does their development process look like and does it fit with what you have in mind for your next project?
* Are they reliable?
* Is their schedule open enough to be able to apply themselves to your project as much as you need from them?
* What is their overall attitude like? Does it fit with your company and is it generally positive and open-minded?

![Img](https://a.storyblok.com/f/86602/720x383/95afb769d3/interview-questions.jpg)

### Interview questions to ask a software engineer

You can find out the answers to a lot of the previous questions simply by looking at the profile of the developer and with initial conversations, but there are some things that you will definitely need to meet face to face (or at least over a video call) to find out.

When it comes to interview time, there’s no harm in picking a handful of candidates, but try not to pick too many or you will be wasting your own time as much as anyone else’s. Check out the following tips for interview questions when you’ve figured out your shortlist:

* What are your biggest motivators in your life as a professional?
* Which experience with similar projects is most relatable to this project based on your understanding of it so far?
* Name a time you disagreed with a colleague and how did the situation resolve?
* What are some characteristics of Ruby and Rails that are unique to it?
* Name some of the main advantages of using Ruby and Rails above a different framework.

<ReadMore> Read also: [Design SaaS Product: 4 Reasons Why You Should Choose Ruby On Rails Framework ](https://selleo.com/blog/how-to-design-a-saas-product-in-ruby-on-rails)</ReadMore>

## 6 Common Mistakes To Avoid when hiring developers

Even with all this information to hand, you still may find yourself making the occasional mistake in the hiring process, but don’t worry. This is always going to happen from time to time and it’s not the end of the world if you can spot it early and figure out what to do with it!

Here are a few of the most common mistakes people will make as they go about **hiring a RoR developer.** Make sure you check these out before you even begin the hiring process so that you don’t end up making any of these mistakes for yourself!

1. **Hiring based on keywords in a resume:** it can be really tempting to try and make shortcuts as you hire and one of the most popular (but foolish) of these is to skim read a resume and hire based on this rather than really trying to understand what the candidate is all about.
2. **Outdated or unnecessary tests for candidates:** while it is, of course, important to test your candidates, selecting the right test is key. If you test them on unnecessary things, it’s going to waste time, and will just end up frustrating the individual you are hiring.
3. **A lack of pre-screening:** remember how we talked about how important it is to be confident you have the right candidate before you bring them to interview? It can’t be stressed enough how important pre-screening actually is!
4. **Not asking the right questions at an interview:** when it comes to interviews, it’s crunch time. Make mistakes here and the worst possible outcome may occur, hiring a candidate who isn’t right. As you probably already know, hiring the wrong candidate can be a massive drain of time and money and could have a negative effect on the overall quality of the project.
5. **Getting the job description wrong:** when people apply for your job or when you approach candidates, it’s partially up to them to decide whether they are right for the role. A good candidate will know if they are up to the task or not, and the best way to translate that is by really nailing your job description and getting all the right keywords in for searches.
6. **Missing out on following up on references:** whether you decide to talk to a candidate’s references before or after you interview them, it doesn’t really matter. Just know that it’s important to do because it could raise any potential red flags that would have otherwise gone amiss.

## Summary

With this guide, you’ll be in the driving seat to knowing whether Ruby on Rails is right for your next project and if so, how to get the best developers on your team for a fine quality web application.

This could be a really exciting opportunity, so make sure that you look in all the right places for your RoR dev and ensure that they are right with the correct screening and interviewing. Patience is key in a task like this.

If you want to find a pool of amazing [RoR developers](https://selleo.com/ruby-on-rails-development-company) right off the bat, you can always[ reach out ](https://selleo.com/contact)to Selleo. We have vast experience in the development of a number of web apps and will be more than happy to show you how we can use our skills to help you.

Using Ruby on Rails could be what you need to take your web app to the next level so stay tuned as we find out how to find and hire Ruby on Rails programmers. 

Hire Ruby On Rails Developers: The Complete Guide

\[TOC\]

Building an app in 2022 is… pretty costly. It can cost as much as $137,000 for a sophisticated app or even $50,000-$70,000 for a standard app. This remains the same for both mobile and web applications.

Don’t get us wrong. This price range can be hugely broad,  and there are multiple steps you can take to bring the cost down throughout the process. They are going to be pretty crucial to the point where they can make or break your entire business.

One thing some startup founders have begun to do is to outsource their development work, especially in the early stages including the MVP. Read on to find out how that could benefit you, and how you can get started with Selleo.

## Why do Startups Fail?

![Img](https://a.storyblok.com/f/86602/720x319/3340727542/why-do-startups-fail.jpg)

If you want to bring in a new business or impress your previous customers, building a top-quality mobile or web app is one surefire way to do this.

An app can give a better representation of your business idea, it can help your current customers make the most out of your company and it can attract potential new customers in ways that a simple website can not.

It appears to be the case that some startup founders have not recognised this over the years, and this has led to the failure of their entire startup businesses. Here are a few reasons why some app development projects have failed:

* **Poor design and development:** strangely, some startup founders fail to recognise the importance of ensuring a high quality UX/UI design, logo and functionality for their app. As a result, they don’t deliver an excellent product if they even deliver one at all, and this makes them look unprofessional when compared to the competition. Furthermore, if you’re looking to sell the app on the market, the top quality product is a must
* **Missing out on the target audience:** you could have the best app in the world but if it fails to align with the target audience of your startup as a whole, you’re going to miss out on the level of engagement you’ll need to drive your business forwards.
* **App development spendings:** on the other end of the spectrum, some startup founders will spend way too much on developing their app and this will be the final nail in the coffin for their business. Failure to budget correctly, and putting too much money into the wrong places can be deadly for any startup.
* **Number of features:** your app might look beautiful, but if it fails to provide the level of functionality needed to drive engagement, nobody will buy it. Since selling the app is your ultimate goal, this part of the development process needs to be planned with special care.
* **Development time:** Getting your completed app over the line within a certain amount of time is also important to its success. If you spend too much time creating an app, your competitors’ apps may get better quicker, and this can leave you in the dark. On top of this, time is money and that’s the fact you need to remember.
* **Failure to build an MVP:** an often overlooked part of the development process of an app is something called a Minimum Viable Product, or MVP for short. This is actually a much more important stage than a lot of people give it credit for, so let’s take a closer look into what it means and how to create one.

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## What is a Minimum Viable Product and Why Should You Build One?

Having an idea for an app is part one, of course. A lot of people think that part two is building it, but there is one key stage that should come before this, and it is building a Minimum Viable Product.

This is the part where you find out whether your idea is feasible or not. A lot of app developments have been closed down at this stage, and it’s super important for this to happen early if it is going to happen at all to avoid wasting cash.

An MVP is a product with the minimum number of features to function. You can build on it and add more later on. All you need your MVP to be is a basic tool that users can give feedback on early.

That feedback is the number one reason you should build an MVP. Having it early rather than when you have finished a full draft of your final app product has the following benefits:

* **Saves time and money:** any problems that arise at an early stage can be much more easily removed than if they are spotted later down the line. This could be something small, such as a visual issue, or something more deep-routed into the functionality of the app.
* **Flags up potential terminal issues:** in a more serious circumstance, it could be decided that the ‘Minimum Viable Product’ isn’t viable at all, so you may even have to cut the whole project. This is going to be much less expensive at stage one than if the app has been fully developed.
* **Helps to improve the final product:** even if things do go really well with the MVP, there is a high chance that somebody will have a great idea for the final product that you did not consider yourself. This is especially true if you decide to outsource MVP development.

![Img](https://a.storyblok.com/f/86602/720x293/dca4f52b2c/benefits-of-mvp.jpeg)

## How Much Does it Cost to Create an App Worldwide?

We’ve detailed how important it is to actually have an app right now, and mentioned that it can be one of the most costly parts of the entire development of your business, but how much exactly does an app cost worldwide in the year of 2022?

<ReadMore> Read also: [MVP App Development | The Art Of Building A Product That Will Sell](https://selleo.com/blog/mvp-app-development) </ReadMore>

Let’s not understate things right now: budgeting to create an app can be quite an arduous experience that requires a lot of patience. However, the success of your business depends on your ability to do this effectively.

A ‘typical’ app can be made within a budget of $50k to $70k and could take 4.5 weeks. However, a more ‘sophisticated’ app could cost up to $137k and would take as many as 26 weeks.

Unfortunately, this information is not hugely helpful. While it does give a very rough idea as to what an app development cost is, there are so many variables at play. Consequently, your app price could very well end up nowhere near either of these figures.

So, what do we need to consider when we try to deliver our first app development budget? There are quite a few things, as you may have expected. We recommend looking into each of the following before you get started:

* Features and functionality
* Mobile, web or both?
* Complexity
* UX & UI
* Maintenance
* Security
* Number of pages
* The location of your team and your customers

A great way to begin to figure out your budget in real terms is by starting at the beginning, with an MVP. Developing your MVP will help you to get a much clearer idea of what your answers to the criteria we just detailed are.

So, now we can break things down a little bit. Let’s build an MVP, and figure out how much that part is going to cost.

### How Much Should Your MVP Cost?

![Img](https://a.storyblok.com/f/86602/720x319/f6b1204aea/how-much-should-your-mvp-cost.jpg)

The bottom line is: building an MVP is a lot less expensive than the overall cost of product development. In fact, the MVP development cost should only be a drop in the ocean when compared to the rest of the process.

Let’s take a look at a few of the costs that are likely to arise when you create your MVP, and what you can do to minimise them. Even though the MVP is partially about saving you money in the first place, we should still be looking to save money further as we create it.

The design costs are always going to be in line with the structure of your app. So, try to cross-reference these structural principles with the criteria we listed in the section above to build an idea of cost for the MVP:

* **Analysis:** research time. Who is your target audience and how are you going to make the best possible product for them?
* **Wireframing:** this refers to the overall layout of a mobile or web app and elements that will appear on the key pages. It’s basically a first look at the overall skeletal framework of the app.
* **Preparing UX design:** how is your app going to look in terms of its user interfaces? How much time and money would you need to put into the visual aesthetics? What functions does the app have that requires a bit more than basic UX design work?
* **Mockup:** page by page, an MVP includes a first look at what the final pages of the app will look like.
* **Interaction between pages:** next to those mockups, you’ll need to consider how the pages work alongside one another. This part is often overlooked and can prove costly if not adequately budgeted for initially.
* **Testing:** now that we’ve been through the four key stages of development, it’s time to do some testing and see how everything holds up under the scrutinous eye of the user.

<ReadMore> Read also: [How Much Does It Cost To Build Custom Software? The Best Ways To Optimize Your Budget](https://selleo.com/blog/how-much-does-it-cost-to-build-custom-software) </ReadMore>

### Factors to Consider when Building an MVP

Here are the three overriding factors that influence the final cost of building your MVP

* **Business: analysis, sales and marketing.**
* **Technical: backend development, testing and more.**
* **Design: user experience, interface and other aesthetics, motion work.**

## What Influences the MVP Development Cost?

Now that we’ve had a good look at all of the parts of the process to build our MVP, let’s check out the influencing factors of that process. The better you control this part, the lower your overall cost will be.

![Img](https://a.storyblok.com/f/86602/720x278/175fe1bbf3/what-influences-the-mvp-development-cost.jpg)

1. **Number of features:** must have, should have, could have, won’t have. These are the four categories for any potential features you are considering so that you can decide whether they are worth implementing in the final product or not. This is a categorisation methodology called the Moscow method.
2. **Development type:** how are you going to build the MVP? Are you going to hire a project manager and full time, in-house developers? Or are you going to outsource the work to save on time and money?
3. **Technology stack:** consider which pre-existing apps and technologies you would like to use in your own tech stack. These can include open source code which really helps to bring the overall price down.
4. **Time frame:** while you want to make sure that you get your MVP out as soon as possible, you should make sure not to underestimate the time frame of it as this can cause all sorts of problems later down the line.

## MVP Building Explained - The Important Decisions to Make

![Img](https://a.storyblok.com/f/86602/720x278/49d239c979/mvp-building-explained_good.jpg)

Now let’s look at some more specifics of MVP development costs - based on the decisions you make.

### 1: The Development Strategy

How you develop your MVP is very important. You’ve basically got three options to pick from:

* **In-house development:** if you have a solid team of in-house developers already then great. But consider the question: is there enough manpower, quality and varied skill sets among them to be able to execute the project to the time frame and quality you are looking for? If not, you may need to hire more people.
* **Freelance development:** instead of hiring someone new altogether, you could always look at a freelancer or two. However, this can prove quite costly indeed.
* **Outsourced development:** perhaps the easier and most affordable method for most startup owners is simply to outsource the work to a pre-existing software development team who can get the job done quickly and efficiently for the best price.

You can always mix and match parts of this, it’s not set in stone.

<Baner name={software-development} />

### 2: Pricing Model

**Fixed Price:** the cost here is not influenced by the amount of time spent or resources used.

* Pros and cons: easier to plan an initial budget but almost certainly harder to finance. It can also have a negative impact on the overall quality of the final product. May be easier to use but more expensive in the long term.
* When to use: if you have a high budget and a clear idea of the project.

**Time and material:** the costs are based on time and resources.

* Pros and cons: more flexible to new ideas but more difficult to budget for. Faster, and more dynamic, but may be uncertain in terms of the final finishing time.
* When to use: more versatile projects where you can afford to be a little bit more flexible with your time and budget.

### 3: Post Launch Costs

Finishing the work with your MVP shouldn’t be where you stop. Some businesses choose to continue the collaboration with software houses to ensure proper functioning of the app. There are also actually quite a few factors that go into the post-build part that we need to think about before declaring our final budget. They look a bit like this:

* **Marketing and advertising**: how are you going to get your first batch of customers to bring about that all important feedback round? You should promote your product as soon as possible and consider the likes of Facebook and Google ads, email newsletters and social media posts to make that happen.
* **Sales:** after testing, where are you going to sell your products? Getting the MVP into the right channels can make or break its success, so pay close attention to this strategy.
* **Maintenance:** after the MVP is done and dusted, you’re still going to need to pay money into it regularly to ensure that it is well looked after. This includes fixing any bugs within the app or updating it to incorporate new features as the app goes through the development process.

## Summary

If you reach out to a software development team with a few ideas about your app, they will come back with a quote for the work. This is easier to budget on, and is likely to be a lot less expensive than a tonne of software developers hired in-house.

This outsourcing can take a huge weight off of the shoulders of any startup founder and the overall product could not only be the difference between a good one or a great one, but it could even be the difference between a successful and failed business.

Check out a [software development outsourcing](https://selleo.com/custom-software-development-company) team with a bunch of great case studies to their name that will prove to you how helpful they can be to your own project. At Selleo, we have plenty of satisfied clients.

**[Reach out](https://selleo.com/contact) for a consultation today to find out more about the costs, time frame and more so that you can compare them against any other potential options you have on your radar.**

Building an app in 2022 is… pretty costly. It can cost as much as $137,000 for a sophisticated app or even $50,000-$70,000 for a standard app. Read the post to find out more!

How Much Does it Cost to Build an App in 2022?

\[TOC\]

When it comes to picking a cooperation model for outsourcing your next piece of software, you’ve got two options: the **fixed price model vs the time and material model**. But which is going to suit your business the best?

The answer to that question depends on a number of factors, but it’s super important to get right. Making the correct decision here could save you a whole bunch of money while at the same time, producing a better quality product in a shorter period of time.

Don’t just jump into whatever model your outsourcing agent of choice recommends. Take your time on this one! We’ve got all the information you could need to make the right decision on this coming right up.

## What is a fixed-price model?

![Img](https://a.storyblok.com/f/86602/720x383/be3b753ed0/what-is-a-fixed-price-model.jpg)

The more traditional model of the two is the **fixed-price model**. It’s also the easiest to understand, but these two features of it do not necessarily make it the best choice!

With fixed-price contracts, the agency you are outsourcing your work to will **calculate the number of hours**, developers and resources they will need and invoice you before they get underway. The money is usually one lump sum, and you’ll get what you pay for.

The simplicity here may sound appealing, and it really is. However, the easiness at the start does not always translate to positive results later down the line. These two advantages are worth bearing in mind, but you’ll note that there are quite a few disadvantages to consider as well.

## Fixed-price contract disadvantages

Let’s take a look at some of the things that might get in your way should you choose to go for a fixed-price plan on your next software development endeavours.

* **Higher cost of the project:** with a fixed-price plan, you’ll need to make sure that you can trust your agency to be accurately estimating the price of the work, and this is not always the case, unfortunately. The scope of work (namely labor and materials) they invoice you could quite easily be ‘overestimated’. You can often check material costs, but less so those of labor.
* **Longer preparation:** having to specify all of your requirements right off the bat will cost you a lot more time upfront than you really need to be spending in a lot of cases. Pitching for a fixed price means that you will need to have everything decided in advance, and this can be really time-consuming.
* **Worse response to changing conditions:** a firm fixed-price contract means that you might not get the results you are looking for. Because it is so difficult to change anything, you won’t be able to be pragmatically engaged with the work, which means that it will be more difficult to respond to any changes of mind or extenuating circumstances later down the line.
* **Lack of flexibility:** being unable to curate your project as you go also means not only that you could well end up unhappy with the results, but also that things will take longer to be completed. Any small change that you need to pitch requires re-calculations on costs. The developer may also award fees for this as well, stretching your budget even further.
* **Less accountability:** the fact that you cannot control costs as easily with a fixed-price incentive contract is just one part of the lack of accountability this type of contract can be guilty of. You’ll also be more hard-pressed to find out if the project is going the way that you would like it to and to the time scale you are looking for.

<Baner name={software-development} />

### When to go with a fixed-price contract

Fixed-price contracts aren’t all doom and gloom. If you’re confident that the project requirements will not change at any point, there is no reason to shy away from setting a fixed-price in theory. There are also a few other reasons that you might want to take up a fixed-price contract:

* When you see no changes being required at any point.
* If you’re confident that your tech stack will not need to be adjusted.
* If, for any reason, you need to ensure that your budget is not altered.

There are also clauses that can be put into this type of contract which help to balance out some of the disadvantages we discussed in the previous section. You might have heard of a fixed price contract with economic price adjustment. What this means is that the company will allow you to make a number of changes and be more liberal with the adjustments in cost to the plan that they make rather than handing out massive fees.

## What is a time and material model?

![Img](https://a.storyblok.com/f/86602/720x383/e443e09cd7/what-is-a-time-and-material-model.jpg)

Some software construction projects suit a different type of costing model, that of the time and material. Here, those outsourcing their software projects are likely to get more flexibility as billing here is based on the hourly rate of the work.

With this newer type of model, production or services are not set as a fixed price as they are in the alternative. The fixed hourly rates are the only costs set in stone for this mode, and potentially some material costs.

A time and materials (t&m) contract allows you to adjust your requirements on the fly (which, as anyone who has run a software project before knows, is likely to happen in most cases) which very much has the potential to save you money overall. But that’s not the only advantage here.

## What are the biggest advantages of a time and material contract?

While the **time and material contract** model is certainly newer than that of a fixed-price version, it doesn’t mean it’s any worse. In fact, in a lot of cases, this newer, more flexible type of contract might actually be a lot better for a lot of projects or individuals.

Here are a few of the main benefits that CEOs and other members of a team can expect to experience when outsourcing their software development using time and material:

* **Flexibility:** perhaps the most exciting thing of all here is the fact that it will be much easier for you to change your mind. As we know, things come up and adaptations have to be made all the time, and the fixed-price model makes that difficult as we discussed earlier on. On the flip side, time and material makes this a whole lot easier.
* **Time savings:** this flexibility will save you time, too. No more admin fees for changes, and if the project works out to take less time than anyone thought it would originally, you’ll be spending less overall by paying as you go.
* **Hourly labour costs:** while it might require a bit more planning for the budget, the hourly labour costs will certainly save you money. You’ll know exactly where your money is going, which will help you to keep on track of your finances and stay in the black all the time.
* **Dynamic workflow:** here, we’re talking about scalability. Not only can the whole project be scaled backwards and forwards more easily, but individual sections of it can too. This means that you can do your best work when it is needed with the minimum of fuss. That’s a win-win for both you and the development agency.

<ReadMore> Read also: [Everything You Need To Know About The RFP Process](https://selleo.com/blog/everything-you-need-to-know-about-the-rfp-process) </ReadMore>

## What to consider before going for a time and material contract

If a time and material contract is beginning to look more appealing to you then this is good news. You’re on the first step to making your life a whole lot easier next time you need to have a piece of software created. However, a reasonable amount of planning is going to need to go into this before you get started (less so than fixed price-price contracts, by the way, as you won’t need to plan the whole project in one sitting). Here are a few tips.

* You’ll need to make sure that you have prepared all of the **contracts required**. The software outsourcing agency that you pitch to is going to want to know what you are expecting in terms of hourly rates and material costs.
* Understand exactly how the agency wants to play things. A **meeting** way ahead of time is always a good idea, so that you can get to know the team and the way that they like to run things.
* Take a look at the **cost of materials**. And we’re not just talking about physical items. Analyse the tech stack that is going to be required and find out how much this is going to cost so that you can add it into your budget.

![Img](https://a.storyblok.com/f/86602/720x540/4329f42fa9/when-to-choose-a-time-and-material-model_obszar-roboczy-1.jpg)

## When to choose a time and material model?

Still not sure that time and material is the right way to go for you? That’s understandable, it is new and fairly unusual to a lot of people still. We recommend taking up this type of contract plan in any of the following situations:

* **Long-term or complex project:** the longer and more complex a software project is, the more likely things are going to get in the way of it (requiring changes). Plus, these projects will of course cost more, so you’re probably going to want to save as much money as possible!
* **You need flexibility:** flexibility isn’t only needed for long or complicated projects. In fact, the majority of software projects these days will require some level of scalability based on all sorts of different factors.
* **Your requirements can change:** not only can extenuating circumstances affect the plan, but you might just have a change of heart. At these times, you’ll wish that you can change things easily.
* **You don’t know the full scope:** even more dramatic than the aforementioned circumstances is if you just do not know how long things are going to take. Here, it’s going to be almost impossible to calculate the cost of a fixed-price contract.
* **You want to only pay for the time spent on development:** do you have in-house developers that can take care of some of the work? Do you want to actually carry out some of the design work yourself, or with another company? A fixed-price contract is effectively not an option here.

<Baner name={know-us} />

## Time and material model: how to do it right

Time and material contracts can require a little more **research** before you should get started. Don’t worry, there’s nothing scary about this! In fact, the right research can allow you to save even more money than you might have done in the first place.

Here are a few tips that we have to get you started as you embark on your quest to find the best time and material outsourcing client and how to make sure that they are right for you:

* **Prepare your development specifications:** you’re only going to have to plan the first week or two of your specifications, which requires a lot less work than a fixed-price contract. However, it’s important to make sure this is done right, as the developer will need to see it to get a feel for the work they are about to embark on.
* **Do your homework:** research, research, research. Finding the right developer is crucial to the success of your project, and we’re not just talking about finding the ones with the most accolades and skills. They’ll need to be right for you and your project specifically.
* **Ask the right questions:** a great way to find out if they are right for you is to sit down and interview them. Find out about their tech stack, any experiences they have with a similar project and how they work as a team to get things done.
* **Check out previous pieces of their work:** a portfolio of work is an excellent way to get a glimpse as to how well a company can perform as well as how similar the work looks in comparison to what you are expecting.
* **Plan in partnership with your outsourcing partner:** once you have selected an agency, make sure that you go through the first stages of planning together to make sure that you stay on the same page.

<ReadMore> Read also: [IT Outsourcing Contracts | A Simple Guide To Complex Legal Matters](https://selleo.com/blog/it-outsourcing-contracts)
</ReadMore>

## Summary

You might not have considered the option of taking up a **time and material contract** for your next project before today, but the fact that you have the option now is only going to put you in a stronger position as you move forward. Whether you do decide to take it up or not, having all the options at your disposal can only be a good thing.

But where do you go from here? It’s time to reach out for some consultations with [software development companies](https://selleo.com/contact). You can do that right here, with us at Selleo. We’re more than happy to talk to you about what we can do for you based on a time and material contracting model, so reach out for a free consultation with us today.

When it comes to picking a cooperation model for outsourcing, you’ve got two options: the fixed price model vs the time and material model. But which is going to suit your business?

Fixed-Price Vs Time And Material Model - What To Choose?

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Outsourcing comes with great advantages for your company, but can also have a lot of complications when it comes to dealing with and maintaining legal contracts.

We have prepared a thorough guide for anybody considering outsourcing. Did you realize that not having a fail-safe outsourcing contract might cost your business a lot of money? Read the guide to learn everything there is to know about the legal and technical aspects of an outsourcing contract.

## What is Outsourcing?

*Outsourcing is a known business practice in which companies hire third parties to provide services or job functions.*

Outsourcing can be highly beneficial in many situations and provides great advantages such as:

* Lower prices (due to economies of scale or lower labor rates)
* Increased productivity
* Increased attention on strategic planning skills due to variable capacity
* Access to resources or skills
* Increased adaptability to shifting business and economic circumstances
* Accelerated time to market
* Lower ongoing investment in internal infrastructure
* Intellectual property, creativity, and thought leadership are all accessible.
* Possible financial infusion as a result of the asset transfer to the new supplier

## What Is an Outsourcing Contract?

![Img](https://a.storyblok.com/f/86602/720x321/8140aefed8/what-is-an-outsourcing-contract.jpg)

In their most basic form:

*Outsourcing contracts are legal papers that describe exactly what you anticipate from the outsourcing business.*

It's a contract that both the parties of an outsourcing project sign. It provides data and specifics on the quality attributes, timeframes, price, incentives, and other aspects of the outsourcing agreement that the two parties are entering into, in addition to the job requirements. The contract also covers legal concerns such as intellectual property rights, non-disclosure provisions, and more.

## Types of Outsourcing Contracts

Let's get to know the different types of outsourcing contracts:

### Time & Material Outsourcing Contract

This methodology is used when a long-term software development project requires an assessment of time or expenses that cannot be prepared in advance. This sort of outsourcing contract is based on the IT services or products requested and the time it takes to accomplish them.

This is a common form of an outsourcing contract that increases versatility and streamlines the completion of long-term projects. Only when the client's criteria are met as the final delivery, does time and the material contract end.

<ReadMore> Read also: [Outsourcing ReactJS Development Services | Learn How To Do It Right](https://selleo.com/blog/outsourcing-reactjs-development-services) </ReadMore>

**When to Consider Going with a Time & Material Outsourcing Contract?**

* When the project's main demand is flexibility
* When defining the project's scope is impossible owing to its complicated and undeveloped idea
* When the execution of your project necessitates the use of new technologies
* When the concept is too unique to predict in advance
* When you still want to have control over your project while an outside team is working on it

**Pros & Cons of Time and Material Contracts**

* Pros - It is a highly innovative and advanced type of Outsourcing
* Pros - Highly appreciated for an emerging high-tech product
* Cons - It can be quite complex and raw in terms of cost and services
* Cons - It requires complete control over the project

![Img](https://a.storyblok.com/f/86602/1500x879/94f8cf4b8f/pros-cons-of-time-and-material-contracts.jpg)

### Fixed Price/Managed Project Outsourcing Contracts

In a fixed price model your criteria and anticipated expenses are explicitly stated in the RFP. As the name implies, it has a set price that must be paid for a certain service. The fixed-cost outsourcing contract limits your options and participation in the project scope. This is one of the most frequent forms of outsourcing contracts, and it's mostly used for IT outsourcing.

**When should you consider going in a Fixed Price Outsourcing Contract?**

* When you know precisely what you need and can communicate it to the outsourcing firm
* When the project work must be completed in a shorter amount of time
* When you know the job will be easy and won't require many adjustments once it's finished
* When you choose the managed project strategy, you don't have to worry about handing over control to the firm.

**Pros & Cons of Fixed Price Outsourcing Contracts**

* Pros - It gives you power over the budget and control cost
* Cons - Only good for very small term projects or services
* Cons - Not ideal for a dynamic development process flow especially at the MVP build stage

<Baner name={software-development} />

### Dedicated Team Outsourcing Contract

You can engage a dedicated crew to work on nothing but your [web development](https://selleo.com/) job in this approach.

You are employing a team to work on your development projects, and the outsourcing contract will spell out any clear objectives or parameters in advance. The group would function as an extension of your in-house team and may be assigned to any project. To create and interact with the team, you can use a variety of engagement models. This will ensure that communication is seamless and unambiguous.

**When to Consider to Form a Dedicated Team Outsourcing Contract?**

* When your project is complicated and requires frequent iterations and changes
* When you're looking to form a long-term partnership with a development team
* When you need to keep tabs on your offshore workers and the projects, they're working on,
* When you're ready to expand and require a dedicated team of developers to work on your project

**Pros & Cons of Dedicated Team Contracts**

* Pros - Good for a long term project and collaboration
* Pros - Helps in business expansion by dividing the workload into skilled labor
* Cons - Complete control over the project and constant monitoring is required

## Why does a Business need an Outsourcing Contract?

Outsourcing contracts protect both entrepreneurs and call centers from any adverse scenarios that may emerge throughout a collaboration. Simultaneously, it acts as a formal document outlining what both sides may anticipate from a continuing agreement. In other words, it governs the whole professional relationship between two companies that both profit from outsourcing. However, drafting one is a time-consuming task.

It aids in the definition of the scope of work and ensures that both parties are legally protected.

## What are the Main Components of a Good Outsourcing Contract?

![Img](https://a.storyblok.com/f/86602/720x321/ce2b100ee5/main-components-of-a-good-outsourcing-contract.jpg)

You must also include numerous outsourcing contract terms and conditions in the outsourcing contract. The following are the major elements of an outsourcing contract:

### Detailed Project Scope

The first component of an outsourcing agreement is defined project scope. It explains what service needs your organization has. You can also include the RFP in this part of the contract, including the software outsourcing firm's response during the bidding process. However, ensure that the project's and services' completed scopes are stated properly for the offshore employees to comprehend. This will detail the key services that the outsourcing firm will provide to the customer.

### Service Level Agreements (Benchmarks)

The components utilized to acquire a service guarantee from the outsourcing business are SLAs or Service Level Agreements. They establish a standard for the level of service that the firm will provide. They assist in encouraging offshore engineers and achieving your company's objectives.

You can state the expected level of performance and incorporate contractual clauses that penalize the firm if it fails to reach the service level. It is recommended that SLAs be as broad as feasible. To assess performance, include essential service levels, key service levels, and other indicators.

### Transfer of Assets

When negotiating an outsourcing agreement, several IT assets must be transferred. Examples of such assets are: telecommunications equipment, computer hardware, equipment leases, and software licensing. To legally transfer these assets to the outsourcing business, a formal sales agreement is necessary.

### Warranty For The Product/Project

Outsourcing development to overseas firms comes with several uncertainties and concerns. The outsourcing vendor may even break the contract, resulting in lawsuits that would not only cost a lot of money but would also take up a lot of your or your company's time and effort. It's always a good idea to plan for the worse. It is also necessary to specify in the contract how any such damages would be recovered.

### Ownership or Governance Of Product

Every business would like total control over the property rights and the finished output. However, in certain outsourcing arrangements, the vendor and the firm outsourcing IT services may share ownership of the software developed.

It may occur when an outsourcing firm customizes its current software or presents a customer with an expansion of its existing software. Whether you're getting new software developed or application modernization, the firm should explicitly state the software's legal title in the outsourcing contract to avoid any future conflicts.

### IP Protection Clause

![Img](https://a.storyblok.com/f/86602/720x383/c6238d5d1a/ip-protection-clause.jpg)

The biggest concern for clients is that their intellectual property, such as their ideas, would be pirated if they share them with an outsourcing firm. It is necessary to include terms to safeguard your intellectual property when outsourcing software development to such countries as India, China.

Here are some other tips to protect your IP legally:

* Copyright of your intellectual property
* Trademark for software or other goods
* The trade secret of the information
* Patent protection & application

**IP Risks in Software Development**

After you've grasped the nature of the IP risks associated with software development, we'll go through six ways to safeguard your IP.

* Before signing a contract with a vendor, it is critical to do thorough research on the vendor.
* Sign a non-disclosure agreement (NDA) with a vendor before employing them or after hiring them (but definitely before disclosing any private information with them).
* Remember that from country to country, the legal framework and accessible mechanisms to safeguard intellectual property rights vary.
* A Master Service Agreement is a contract that spells out the conditions of any future contracts between the parties.
* Make sure you're working with a company that follows proper processes.
* When outsourcing to external parties, restricting server and data access is another way to safeguard your intellectual property.

### Cost & Payment Structure

This is particularly useful when the outsourcing model is a fixed-cost model. In reality, each outsourcing contract should explicitly state the outsourced arrangement's cost, payment method, and payment structure. It should provide answers to the questions of when, how, and who to charge. Aside from that, the amount to be paid and how it will be broken up should be clearly stated.

### Dispute Resolution Section

When you outsource your job to a team outside of your organization, the likelihood of a disagreement increases dramatically. And, to avoid legal conflicts, you must be prepared for such disagreements. To address such disagreements, a third party or arbitrator should be appointed, and his or her presence should be noted in the outsourcing contract.

<ReadMore> Read also: [Outsourcing Software Development: MVP, Proof of Concept, Prototyping](https://selleo.com/blog/mvp-proof-of-concept-prototyping) </ReadMore>

### Duration For Completion

In many situations, such as the fixed-cost model, the project scope is obvious, and setting a timetable is not problematic. It is critical to specify the term for which the deal will be in effect in the contract. The length of your contract has a significant impact on whether your outsourced project succeeds or fails.

### Subcontracting Clause

Another common issue from outsourcing purchasers is whether the software outsourcing firm itself will supply the services or be subcontracted to other developers. While many outsourcing firms desire this freedom in their outsourcing contracts, the decision to allow or prohibit subcontracting is entirely up to you.

### Indemnification Clause

Outsourcing contracts may at times raise some legal concerns. An indemnity provision guarantees that any outsourcing business negligence is borne solely by the service provider. This safeguards your business against any losses that may occur during or after the project.

### Exit Strategy

How do you end the outsourcing contract? Would it be detrimental to your business? Will you be able to control the software completely? All of this should be addressed in your outsourcing contract's exit strategy section. The software development firms you select should be willing to work with you on your exit strategy.

## Top Legal Aspects to Focus in an Outsourcing Contract

![Img](https://a.storyblok.com/f/86602/720x383/578b29593c/top-legal-aspects-to-focus-in-an-outsourcing-contract.jpg)

* **Retained Rights**: This describes each firm's pre-existing intellectual property and stipulates that those parties retain all rights to their previously developed intellectual property.
* **Pre-existing Intellectual Property:** This section builds on the first by discussing what pre-existing intellectual property is, how to utilize it, what it can't be used for, and so on.
* **Ownership of Deliverables:** Who owns the deliverables once they've been completed?
* **No Rights to Customer Intellectual Property:** Essentially, this means that the third party will not keep any intellectual property from their clients, even if the client agrees to let them use it to finish their contract.
* **Confidential Information:** This section explains what "confidential information" is, how to utilize it, secure it, and other related topics. This section might include a colossal amount of legalese. Following that, most contracts transition to 'customer private information,' which protects the contractor and the contractee.
* **Non-Disclosure:** This refers to how information is disseminated to the public and similar matters. More information about this sort of paper may be found here. Information about the right to disclose is usually included as well.
* **Disclosure of Potential Conflicts of Interest**
* **Termination and How It Works:** This part is fairly lengthy, and it covers who has the authority to terminate the contract, when, how, and under what conditions. Then it goes on to explain what happens if the contract is terminated.
* **Ensuring Provider Compliance:** The final section requires the provider to agree that they will not infringe on patents or other intellectual property laws, that they will finish the duties in a professional direction, that they will do the quality work, that they have all of the authorizations they require, and that they will follow all applicable laws.

<Baner name={agile-team} />

## Clauses to Avoid in an Outsourcing Contract

There are some key clauses that we recommend you avoid in your contract as they might bring more bad than good to you and your business. Here’s a list of the ones that should make your red light go on.

1\. Terms of the contract stating that the buyer is responsible for all exit management fees.

2\. Contract terms that say your supplier's advice and statements aren't included.

3\. Contract terms that include KPIs that aren't related to the project's goals

4\. Contract clauses that restrict a client's ability to correct a fault

5\. Contract terms that don't specify for how long service can be suspended.

6\. Contract Terms that eliminate client expenses if results aren't reached

7\. Contract Terms that denote service credits as THE remedy for poor performance

8\. 'Agree to Agree' Contract Terms

9\. Contract clauses that exclude you from paying any costs if something goes wrong.

10\. For extra project work, standard contract terms apply.

11\. Contract terms with no agreed-upon cooperation

12\. Contract terms that shift risk on testing and acceptance

13\. Contract Terms that assume all changes are chargeable

## Conclusion

To conclude the article, we recommend first negotiating the parts of the contract with the third party because once the contract is formed, you will need to be obliged to it at all cost. At your end, create a skeleton contract first and leave the rest for negotiations. Once you are done negotiating, and the terms are finalized, you can form the final draft of your outsourcing contract. In some cases, the software house can provide you with a ready-made contract template based on their previous agreements. It will give you a head start and simplify the negotiation process.

Another important thing to consider while forming an IT outsourcing contract for your business is to make sure you include complete and straightforward details to avoid confusion and misunderstanding. The agreement should be crystal clear. A well-defined outsourcing contract can be the key to a profitable outsourcing venture.

If you are looking for an [IT outsourcing company](https://selleo.com/software-development-team) for long or short-terms of projects, then don't forget to contact us. We will provide you not only with the best talent in the town with exceptional services, but we will also keep everything crystal clear in creating a well-drafted outsourcing contract. [Contact us Now](https://selleo.com/contact)!

Outsourcing comes with great advantages for your company, but can also have a lot of threats and complications when it comes to dealing with and maintaining legal contracts. This post will help you overcome them.

Alina Turek

Blog posts that I worked on

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Fixed-Price Vs Time And Material Model - What To Choose?

IT Outsourcing Contracts | A Simple Guide To Complex Legal Matters

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