Building IT Relationship 101: Collaboration Models

Want to build a mutually beneficial relationship with your clients? Of course you do.

That is what every business strives to achieve – the ultimate goal for every market player out there. Ironically, what’s so obvious is in fact the most challenging part of any business practice.

The need to build relationships refers to every industry across the board, and so do the general guidelines for actually creating the relations. Also, in many industries there are collaboration models which regulate just how a business interacts (i.e. collaborates) with its customers.

The way that is done is of paramount importance, as some models just may not be suitable your goals. That’s a matter of strategy – and that’s why it matters so much.

IT is a ‘booming’ industry. There are many of both – customers and businesses. How does an IT business collaborate with its clients? Here are the four basic models of doing so, employed by major international corporations and small outsourcing firms alike. Ever service firm is employing these models in one way or another.

 1. FIXED PRICE

This model suits when short-term issues come up with a project. Usually, the customer faces precise deadline, budget and project scope. Since the developer team is to handle all the risks, profound knowledge in IТ-technologies is required. The team readies project specification, calculates working hours, and proposes a fixed value to the customer.

In cases when the customer insists on fixed price, but the team cannot provide a precise evaluation of working hours (because of new technology, project time 300+ hours, etc.), the project is divided into a number of phases, which are given a min-max evaluation separately. Fixed price collaboration model assumes:

•   Completely defined project scope
•   Fixed timeframes
•   Precisely defined budget
•   Fixed project team

 2. TIME & MATERIAL

This model is most suitable in cases when it’s impossible to define the requirements to the product since they may change in the development process. Usually agile development methodology (SCRUM and KANBAN frameworks) is employed with the model. Time & material collaboration model assumes:

• No defined project scope
• Features easily added/removed
• Personnel selection/project team size flexibility

3. OFFSHORE DEVELOPMENT CENTER (ODC)

The model assumes a dedicated team created for the project. A dedicated team is a team of developers (IT-professionals) with knowledge and skill to complete a certain project. This model is perfect for companies, which do not have their own development team, as it ensures higher quality at lower costs.

The dedicated team is fully integrated into the customer’s business processes, allowing long-term strategic relations and unobstructed operation.

Offshore development team model of cooperation (ODC) assumes:

• Dedicated team
•  Full control over hiring/team size
•  T&M or Cost+ models
•  Long-term collaboration

 4. SERVICE-LEVEL AGREEMENT (SLA) MODEL

SLA-based model of the cooperation commonly used in the support and maintenance-related projects or activities under the BPO agreements. The SLA implies usage of the model of providing services with precisely defined constraints and requirements. SLA for IT services it usually includes:

• Incident management
• Problem management
• Change management
• Release management

Of course, these models are the major ones, the most fundamental. Bear in mind, that the overwhelming complexity of some modern IT projects may be well beyond the basic collaboration frameworks, and require either an utterly different approach (less likely), or a combination of abovementioned models (more likely).