The time and materials (T&M) model is a contract type that is used to reimburse one party based on the time spent on the projects, the materials used, and other fees related to the service being provided. This is also known as a cost-reimbursable contract or cost-plus contract. The T&M models (“pay as you go”) is the best choice when the requirements of a project are not clearly defined at the beginning, especially if the scope of work is likely to change during the development process.
Dynamic scope of work
One of the biggest benefits of this model is that it allows clients to adjust requirements and deploy new features without disrupting the workflow significantly. The involving parties are not obliged to follow the original software project plan under a T&M contract. As a result, they can simply adjust not only the project specifications but also the team size based on their current needs and priorities.
Since a fixed-price model just allows the client to participate in the development process during the initial planning phase, customers will have no control over the progress. In a Time and Material contract, the clients will get significant transparency. The customer has total power over the development and can interact directly with the engineer if something goes wrong.
Cost control & Budget flexibility
Cost control and budget flexibility are two more strategic advantages of the T&M model. Customers can effectively plan out their budgets due to clearly defined price units. Furthermore, with a deeper understanding of the entire process, the client can simplify or remove specific elements or functionalities at any time, saving costs and eliminating unnecessary charges.