Four engagement models, and the honest trade-off in each.
Every model transfers risk somewhere. Fixed price moves it to us and you pay a premium for that. Time and materials moves it to you and costs less on average. Anyone presenting one model as strictly better is selling the one that suits them.
An engagement model is the commercial structure of a software project — how scope is fixed, how work is billed and who carries the risk of things changing. Canopus offers four: fixed price, time and materials, dedicated team, and white-label partnership. The right one depends on how well the requirement is known, not on project size.
The four models, compared on what actually matters
Including the row most comparison tables leave out: who absorbs the cost when the estimate was wrong.
| Fixed price | Time & materials | Dedicated team | White-label | |
|---|---|---|---|---|
| Risk sits with | Us | You | You | Shared with the agency |
| Best when | The specification is written and stable | Requirements will evolve as you learn | The roadmap is continuous, not a project | You resell delivery under your own brand |
| Scope changes | Change request, priced before work | Reprioritise freely each sprint | Reprioritise freely each sprint | Per your client's contract |
| Cost predictability | Exact, agreed upfront | Monthly, with a sprint cap if you want one | Fixed monthly per engineer | Fixed monthly or per project |
| Average total cost | Higher — includes a risk premium | Lower on average | Lowest per engineer-month | Depends on structure |
| Speed to start | Slower — needs discovery first | Fast, can start on a rough brief | 3–4 weeks to assemble | 2–4 weeks |
| Billing | Milestones against deliverables | Monthly in arrears, timesheeted | Monthly per engineer | Monthly, on your schedule |
| Notice to stop | End of current milestone | 30 days | 30 days | 30 days |
Scroll the table sideways to compare all four models.
What each one is like to work in
Fixed price — certainty, bought
You get a number, a date and a defined deliverable. We carry the risk that it takes longer than estimated, and the price includes a premium for carrying it. Scope is controlled through a written change process, which is a feature rather than bureaucracy: it's what keeps the number true.
Requires: a paid discovery phase first. We won't quote fixed price from a conversation, because a number given without a specification is either padded or about to be renegotiated.
Choose it when: a board approved a budget, procurement needs a fixed figure, or the deliverable is genuinely well understood.
Time and materials — flexibility, and a lower average cost
Monthly billing against actual effort, with a timesheet breakdown by person and task. You reprioritise every sprint at no cost. Add a per-sprint spend cap if you want a ceiling — most clients do, and it removes the main objection to the model.
Requires: someone on your side who owns the backlog and attends sprint demos. Without that, T&M produces activity rather than progress.
Choose it when: you're discovering the product as you build it — most MVPs, most AI work, most legacy modernisation.
Dedicated team — capacity on your roadmap
Named engineers working full time in your process, your board, your standups. You set priorities directly; we handle employment, cover, review and progression. Billed monthly per engineer, 30 days' notice to change the size.
Requires: your own technical leadership. We supply engineers, not a product direction.
Choose it when: the work is ongoing rather than a project with an end. How a dedicated team is staffed and run.
White-label partnership — delivery under your brand
For agencies and consultancies who sell software delivery but don't want to carry a permanent engineering team. We work under your brand, in your process, invisible to your client. Fixed monthly capacity or per-project.
Requires: clarity on who owns the client relationship and who makes technical decisions when the two conflict.
Choose it when: you're an agency, not an end client. How the partnership works.
When we'll tell you the model you asked for is wrong
Three situations where the requested model would harm the project, and we say so before signing rather than after.
Fixed price on an unknown
"We want a fixed price for an AI assistant" — before anyone has measured whether the accuracy is reachable. A fixed price on an unknown forces both sides to pad: we price the worst case, you pay for risk that may not exist, and every conversation becomes a scope argument.
What we propose instead: a fixed-price discovery or evaluation phase, then a fixed price on the part that's now known. You get certainty where certainty is possible.
Time and materials with nobody steering
T&M works when someone on your side owns the backlog and shows up to demos. Without that, we're guessing at priorities and you're paying for the guesses. It's the model most likely to end with a client feeling they spent a lot and got something they didn't want.
What we propose instead: fixed scope for a first release, so there's a defined target, then T&M once your product owner is in place.
A dedicated team for a three-month project
A dedicated team costs three to four weeks of assembly and onboarding before it's productive. For a defined project with an end date, that's overhead you're paying for and won't recover — a fixed-scope engagement gets there faster and cheaper.
What we propose instead: fixed scope or T&M now, and the dedicated-team conversation when the roadmap becomes continuous.
What's in the contract, whichever model you pick
Standard terms, so your legal team can review them without a negotiation cycle over the basics.
- Mutual NDA before discoverySigned before you send us anything sensitive, not after.
- Master services agreementThe commercial frame — one negotiation, reused for every subsequent statement of work.
- Statement of work per engagementScope, deliverables, acceptance criteria, schedule and price in one document.
- IP assignment on paymentRepository, infrastructure, credentials, documentation. No retained licence.
- Data processing agreementGDPR-aligned, with sub-processors listed and regions named.
- Defined acceptance processWhat "done" means, how long you have to review, and what happens on rejection.
- 30-day termination, either directionNo penalty. You keep everything built and paid for.
- Liability capped and statedOpenly, in the MSA, rather than discovered during a dispute.
We're used to redlines and we don't treat a marked-up contract as a warning sign — a client whose legal team reads carefully is a client who intends to hold up their end.
Billing, terms, changes and exits
Which engagement model is cheapest?
Time and materials, on average, because fixed price includes a risk premium covering what neither side can foresee. Fixed price is cheaper only when the specification is genuinely complete and doesn't change — which happens less often than proposals assume. If certainty matters more than the last ten per cent of cost, fixed price is still right, and we'll say so.
Do you require a deposit, and how does billing work?
Discovery is invoiced separately at the start. On fixed price: typically 30% at kick-off, then milestone payments against agreed deliverables, with a final tranche on acceptance. On T&M and dedicated teams we invoice monthly in arrears with a timesheet breakdown by person and task.
What if the fixed-price scope turns out to be wrong?
Anything inside the agreed scope gets reprioritised at no extra cost — you decide what drops. Anything outside comes back as a written change request with cost and schedule impact, approved before work starts. If discovery produced a materially wrong specification, we re-plan with you and show the impact rather than absorbing it silently and delivering late.
Can we switch models partway through?
Yes, and it's common. A frequent pattern is fixed-price discovery and first release, then a dedicated team for ongoing delivery once the roadmap is continuous rather than a defined project. Switching needs 30 days' notice and a short re-contract, not a renegotiation of everything.
What are the payment terms and currency?
We invoice in USD, GBP, EUR, AED or INR. Terms are 14 days net by default, and we'll accommodate 30 days where procurement policy requires it. Work continues normally through a late invoice unless it goes materially overdue, at which point we raise it as a conversation before it becomes a stoppage.
What's in the contract as standard?
A mutual NDA, a master services agreement and a statement of work per engagement. The MSA covers IP assignment on payment, confidentiality, data processing, liability caps, notice periods and dispute resolution. We're used to redlines from legal teams.
How do you handle IP if the project stops early?
You keep everything built and paid for. IP assigns on payment for completed work, and you receive the repository, infrastructure access and documentation at exit regardless of why the engagement ended. There's no clause that makes stopping expensive.
Do you work with procurement and security questionnaires?
Yes, routinely. Our security and compliance page answers most of what a vendor assessment asks — data handling, access control, secure development practice, sub-processors and incident response — so your reviewers can start from a document rather than a blank questionnaire.
Related pages
Tell us how well you know the requirement.
That single answer picks the model. If the requirement is written and stable, fixed price. If you're still learning, time and materials with a cap. An engineer replies within one business day with a recommendation and the reasoning.
- Email — [email protected]
- Phone / WhatsApp — +91 817 979 7732
- NDA before you send anything sensitive