Different Types of Outsourcing Models - Pricing Models

It is a common knowledge that outsourcing involves getting an outside help to focus more on your core business operations. However, once you understand the different  types of outsourcing models, you can better hire the outsourced service that best fits your requirements.

Outsourcing Pricing Models

The pricing structure of outsourcing services changes over the course of the times. This is what makes the pricing frameworks an important part of the different types of outsourcing models.

• Fixed Price (FP) Model

The FP model is an old approach of outsourcing pricing. A standard rate is imposed on the host employer, which is charged depending on the client’s preference- all inclusive of workspace and tools charges. The catch here is that until they complete the project, only then they will receive the payment.

• Time and Materials (T&M) Model

The T & M Model is a prevalent choice among IT projects. This involves bidding on a given project and providing a proposal based on the client requirements.

• Incentive-based Model

  Incentive-based model is pretty much self-explanatory. This is an add-on clients give on top of the agreed-upon rates for exceeding the goals and metrics in the contract.
  

• Shared Risk-Reward Model

  Shared risk-reward approach is like the incentive-based model where it holds additional bonus when your outsourced staff achieves a certain milestone in the partnership. 

Getting a comprehensive look at the different types of outsourcing models can greatly boost your engagement’s performance and dictate how the relationship will grow over time. Make sure to carefully study which best compliments your processes to get the best results as possible.

In need of an outsourcing partner that accurately performs your desired service? With D&V Philippines, we make sure to attend to our client’s requirements. Our outsourced bookkeeping services are being taken care of by our finance and accounting experts who have a broad expertise in accounting and compliance.

Download our Outsourcing: How to Make it Work guide today to learn how we can be your reliable outsourcing partner and how we can make the most out of the engagement.