Each project must have its contractual arrangement. The main contractual arrangements are the following:
- Fixed fee contract. Based on the content of a delivery that is shared (in writing), the offshore company commits to deliver the content of the agreement for a pre-agreed price.
- Time and material. The client will pay the amount of time and material that is needed to reach a goal.
- Combination. The initial project is clearly defined as a fixed fee project for the base project and all the additional developments are defined as time and material, only upon approval of the client. Another base project may be defined when the first one is finished.
- Extended fixed fee. The fixed fee agreement includes a certain reserve to be able to accept some changes without revising the fixed fee agreement.
The contract type that you choose has a direct influence on how the teams will behave, the natural priorities they will have and the direct influence you can have on the project.
| Influence on the project | Financial protection | Productivity improvement | Flexibility of requests |
| Fixed fee | - - | ++ | + | - - |
| Time and material | ++ | - - | + | ++ |
| Combination | + | + | ++ | ++ |
| Extended fixed fee | - | ++ | + | + |
Focusing on contractual clauses
Very naturally, the offshore companies (like all others) focus on their direct contract obligations which are the base of your appreciation. The offshore companies will always try first to justify the quality of their services through the exact respect of their engagements.
This can be very positive but can also have many wrong side effects. The contractual objectives are not always the operational objectives. For example, it is quite likely that the contract defines a series of features that must be ready for a certain date. The offshore company may focus on this, ignoring all the additional features or changes that were recently defined that are not directly stated in the contract. Any priority that is not in the contract will always come in the second position, even if they are much more important operationally.
Bonus and Penalties
Some contracts may also have penalties if the goal is not reached on time or with insufficient quality. Such penalties can apply to any type of contract.
Other contracts define bonus for exceptional quality or performance.
Included Services
You should also clearly identify what is part of the contract and what is not. For example, do you provide the PCs the team will use? Do you provide the servers? Do you pay for Internet bandwidth? Do you pay for phone communications? All these questions can be decided when negotiating the contract and directly impact the behavior of the partner. For example, PCs will not be replaced as quickly as they should, people don't call very often, or the Internet bandwidth is very narrow.
Pricing
For information purposes, depending on the contract type, size, duration, and included services, we can assume that offshore services will evolve between $1400 and $3000 per month and per person on average.
Focusing on contractual clauses
Very naturally, the offshore companies (like all others) focus on their direct contract obligations which are the base of your appreciation. The offshore companies will always try first to justify the quality of their services through the exact respect of their engagements.
This can be very positive but can also have many wrong side effects. The contractual objectives are not always the operational objectives. For example, it is quite likely that the contract defines a series of features that must be ready for a certain date. The offshore company may focus on this, ignoring all the additional features or changes that were recently defined that are not directly stated in the contract. Any priority that is not in the contract will always come in the second position, even if they are much more important operationally.
Bonus and Penalties
Some contracts may also have penalties if the goal is not reached on time or with insufficient quality. Such penalties can apply to any type of contract.
Other contracts define bonus for exceptional quality or performance.
Included Services
You should also clearly identify what is part of the contract and what is not. For example, do you provide the PCs the team will use? Do you provide the servers? Do you pay for Internet bandwidth? Do you pay for phone communications? All these questions can be decided when negotiating the contract and directly impact the behavior of the partner. For example, PCs will not be replaced as quickly as they should, people don't call very often, or the Internet bandwidth is very narrow.
Pricing
For information purposes, depending on the contract type, size, duration, and included services, we can assume that offshore services will evolve between $1400 and $3000 per month and per person on average.
Focusing on contractual clauses
Very naturally, the offshore companies (like all others) focus on their direct contract obligations which are the base of your appreciation. The offshore companies will always try first to justify the quality of their services through the exact respect of their engagements.
This can be very positive but can also have many wrong side effects. The contractual objectives are not always the operational objectives. For example, it is quite likely that the contract defines a series of features that must be ready for a certain date. The offshore company may focus on this, ignoring all the additional features or changes that were recently defined that are not directly stated in the contract. Any priority that is not in the contract will always come in the second position, even if they are much more important operationally.
Bonus and Penalties
Some contracts may also have penalties if the goal is not reached on time or with insufficient quality. Such penalties can apply to any type of contract.
Other contracts define bonus for exceptional quality or performance.
Included Services
You should also clearly identify what is part of the contract and what is not. For example, do you provide the PCs the team will use? Do you provide the servers? Do you pay for Internet bandwidth? Do you pay for phone communications? All these questions can be decided when negotiating the contract and directly impact the behavior of the partner. For example, PCs will not be replaced as quickly as they should, people don't call very often, or the Internet bandwidth is very narrow.
Pricing
For information purposes, depending on the contract type, size, duration, and included services, we can assume that offshore services will evolve between $1400 and $3000 per month and per person on average.
Focusing on contractual clauses
Very naturally, the offshore companies (like all others) focus on their direct contract obligations which are the base of your appreciation. The offshore companies will always try first to justify the quality of their services through the exact respect of their engagements.
This can be very positive but can also have many wrong side effects. The contractual objectives are not always the operational objectives. For example, it is quite likely that the contract defines a series of features that must be ready for a certain date. The offshore company may focus on this, ignoring all the additional features or changes that were recently defined that are not directly stated in the contract. Any priority that is not in the contract will always come in the second position, even if they are much more important operationally.
Bonus and Penalties
Some contracts may also have penalties if the goal is not reached on time or with insufficient quality. Such penalties can apply to any type of contract.
Other contracts define bonus for exceptional quality or performance.
Included Services
You should also clearly identify what is part of the contract and what is not. For example, do you provide the PCs the team will use? Do you provide the servers? Do you pay for Internet bandwidth? Do you pay for phone communications? All these questions can be decided when negotiating the contract and directly impact the behavior of the partner. For example, PCs will not be replaced as quickly as they should, people don't call very often, or the Internet bandwidth is very narrow.
Pricing
For information purposes, depending on the contract type, size, duration, and included services, we can assume that offshore services will evolve between $1400 and $3000 per month and per person on average.
Focusing on contractual clauses
Very naturally, the offshore companies (like all others) focus on their direct contract obligations which are the base of your appreciation. The offshore companies will always try first to justify the quality of their services through the exact respect of their engagements.
This can be very positive but can also have many wrong side effects. The contractual objectives are not always the operational objectives. For example, it is quite likely that the contract defines a series of features that must be ready for a certain date. The offshore company may focus on this, ignoring all the additional features or changes that were recently defined that are not directly stated in the contract. Any priority that is not in the contract will always come in the second position, even if they are much more important operationally.
Bonus and Penalties
Some contracts may also have penalties if the goal is not reached on time or with insufficient quality. Such penalties can apply to any type of contract.
Other contracts define bonus for exceptional quality or performance.
Included Services
You should also clearly identify what is part of the contract and what is not. For example, do you provide the PCs the team will use? Do you provide the servers? Do you pay for Internet bandwidth? Do you pay for phone communications? All these questions can be decided when negotiating the contract and directly impact the behavior of the partner. For example, PCs will not be replaced as quickly as they should, people don't call very often, or the Internet bandwidth is very narrow.
Pricing
For information purposes, depending on the contract type, size, duration, and included services, we can assume that offshore services will evolve between $1400 and $3000 per month and per person on average.
Focusing on contractual clauses
Very naturally, the offshore companies (like all others) focus on their direct contract obligations which are the base of your appreciation. The offshore companies will always try first to justify the quality of their services through the exact respect of their engagements.
This can be very positive but can also have many wrong side effects. The contractual objectives are not always the operational objectives. For example, it is quite likely that the contract defines a series of features that must be ready for a certain date. The offshore company may focus on this, ignoring all the additional features or changes that were recently defined that are not directly stated in the contract. Any priority that is not in the contract will always come in the second position, even if they are much more important operationally.
Bonus and Penalties
Some contracts may also have penalties if the goal is not reached on time or with insufficient quality. Such penalties can apply to any type of contract.
Other contracts define bonus for exceptional quality or performance.
Included Services
You should also clearly identify what is part of the contract and what is not. For example, do you provide the PCs the team will use? Do you provide the servers? Do you pay for Internet bandwidth? Do you pay for phone communications? All these questions can be decided when negotiating the contract and directly impact the behavior of the partner. For example, PCs will not be replaced as quickly as they should, people don't call very often, or the Internet bandwidth is very narrow.
Pricing
For information purposes, depending on the contract type, size, duration, and included services, we can assume that offshore services will evolve between $1400 and $3000 per month and per person on average.