Project Management

Pre-Paid Staffing Model: A Distributed Factory

Sreenivas Kunapuli

Distributed resources across geographies are very common in a software development company. A Pre-Paid staffing model has an interesting parallel to flight booking and looks at the economies of scale to benefit both service industry organizations provisioning the Pre-Paid model and clients that require a distributed factory setup.

Costing, cost estimating, budgeting, and control are all important aspects to executing projects. Why pay more when you know, as a project manager, that you can have it for less with the same set of resources at hand? Developing an approximation of the costs of the resources needed to complete the project, aggregation of the estimated costs to establish a cost baseline, and influencing the factors that create cost variance are of predominant importance to a project manager. In that context, this article brings along a differentiated model for cost control and, hence, tries to position a point-of-view that cost control limits can apply according to the type of billing that is agreed upon for the execution of the project.

There are essentially two types of billing for contract work—Fixed Price (FP) or Time and Materials (T&M). Both have their advantages and disadvantages. This article introduces a third type of billing for a contract, called “Pre-Paid” (PP…

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