Types of Contracts

IT Outsourcing engagement models

Pentalog offers 3 types of outsourcing service provision contracts to adapt to diverse situations, requirements and expectations.

With agile practices becoming mainstream, new hybrid engagement models can be implemented to best fit each of our clients’ needs and objectives (fixed price for specific sprints within a dedicated team project, for example).

Offshore / Nearshore Dedicated Team

Also referred to as a virtual delivery center, service center, or competence center, our dedicated team engagement model perfectly matches the types of context where:

  • the project does not have a clearly defined scope
  • the client is willing to coordinate and control the remote team himself
  • the client needs versatile resources to ensure flexibility along the project lifecycle

IT Outsourcing Services

A dedicated offshore / nearshore team is usually made of a project director based in or close to the client’s country, a project manager, at least 3 developers and a tester. A dedicated team can also be split into several groups in one or more locations. Testing activities can, for instance, be carried out in Vietnam to make the best out of time zone differences and benefit from lower costs. It stands for a genuine interface between business (product owner) and technical departments and takes on project management, document management, competence and knowledge management as well.

The team size can vary from 3 to 50 members. Each project usually starts with an onsite kick-off period at the client’s premises.
Invoicing is time and material-based, relying on a reporting system in which settings and content are to be established by mutual agreement.
Our dedicated team engagement model is the most popular type of contract among Pentalog’s clients who expect both flexibility and efficiency.

Download our price guide to get a detailed view of our services and rates

Offshore / Nearshore Fixed-Price Contract

The fixed-price contract with performance-guaranteed execution is suited for projects with the following context:

  • the scope is detailed and clearly defined
  • the client expects a commitment to a fixed budget and deadline for that scope
  • the client does not intend to be directly involved in project management
  • the client wants to benefit from a guarantee for the developed application

Based on the functional specifications provided by the client, we create a workload assessment, development schedule and cost estimation.

Once the client has accepted our offer, Pentalog commits to the scope of the project as it is defined in the offer or in the corresponding specification record, to the deadlines announced and estimated budget.
This type of contract involves strict observance of the scope defined at the beginning of the project. Any request for changes from the initial scope is subject to an impact assessment (workloads and deadlines) by the project manager, followed by an update of the contractual schedule and budget. The Project Quality Plan signed by both parties is a legally binding document.

Invoicing is based on the bill book established in the formal offer. It generally includes a fixed pre-payment before the beginning of service provision, a percentage of the total price due with each delivery and final payment due at the end of the guarantee period.

Great Digital Products Aren’t Created By AccidentPentagility Means IT Excellence at Speed

Creating great software starts with a team infrastructure that breaks down silos, anticipates risks and communicates openly.
As an IT outsourcing provider, Pentalog equips teams with modular rules and dashboards, to ramp up, scale and pivot quickly, with minimal friction, maximum support and costs you control.
We call this toolkit Pentagility, an agile governance methodology for building trusted client relationships.

Offshore / Nearshore Service Level Agreement

SLAs stand for a commitment to service quality. This type of contract is especially designed for maintenance, facilities management or hosting services. It is particularly well suited for clients who expect a commitment to service continuity and response times. Deadline, productivity and quality commitments are to be defined in the Project Quality Plan.

Invoicing is time-and-material based, with a bonus / penalty system related to monthly KPIs defined together with the client (calculation method, data source), provided by the project manager and reviewed with the client in a monthly steering committee.

Read more about our Quality assurance policy