Time and Material (T&M) Model

Insights

August 19, 2025

Table of Content

Table Of Contents

Share this article

The Time & Materials (T&M) model, sometimes referred to as the Cost & Materials (C&M) model, is one of the most widely adopted pricing models in IT outsourcing. Instead of committing to a fixed cost upfront, clients pay for the actual time and resources spent on development. This approach provides flexibility, transparency, and adaptability, making it particularly effective for projects with evolving requirements or uncertain scope. At Newwave Solutions, a significant portion of our projects are successfully executed under the T&M model, ensuring both agility and cost accuracy throughout the development lifecycle.

Table Of Contents

When to Use the T&M Model?

The T&M model is recommended for projects that require dynamic adjustments, transparency, and close collaboration. It allows project scope and priorities to evolve as development progresses, enabling teams to respond to changing requirements or market demands. Clients have full visibility into hours, resources, and costs, while payments align directly with the work completed. By mitigating risks associated with evolving or unclear requirements, the T&M model ensures smoother execution. Additionally, its emphasis on ongoing interaction between the client and development team fosters effective collaboration, supporting successful outcomes for complex or iterative projects.

So, which Projects Best Suited for T&M?

Projects with frequent or evolving requirements.

Initiatives that require fast responses to market or customer needs.

Workstreams need high flexibility, such as iterative software development, reengineering, or bug fixing.

Clients value a transparent working environment and close collaboration with the vendor.

Pros and Cons of the T&M Model

While the Time & Materials model offers multiple advantages, it also comes with certain limitations that businesses should carefully evaluate. Below is a balanced view of its key strengths and weaknesses:

Pros	Cons
Flexibility: Easily adapt requirements and scope as the project evolves.	Budget Uncertainty: Total project costs may fluctuate depending on scope changes.
Transparency: Clear visibility into hours, costs, and resource allocation.	Time Tracking Dependency: Requires strict monitoring of hours and resources to avoid inefficiency.
Accuracy: Payments are directly tied to actual effort and deliverables.	Potential for Extended Timelines: Flexibility can sometimes prolong development cycles.
Risk Reduction: Lowers risks of unclear or shifting requirements.
Collaboration: Promotes closer communication and partnership throughout the project.

Why Partner with us for your T&M Projects?

Choosing the right partner is as important as selecting the right pricing model. At Newwave Solutions, we deliver:

Agile-driven delivery: Our development process is built on adaptability, enabling us to respond quickly to your business needs.

Decade of expertise: With over 14 years of experience, we understand how to balance flexibility with efficiency.

Dedicated collaboration: We ensure continuous communication, aligning our team with your evolving priorities.

Focus on value: Beyond delivery hours, we emphasize measurable outcomes and long-term success.

The T&M model provides flexibility and transparency for evolving projects. Combined with Newwave Solutions’ expertise, it ensures effective collaboration, cost control, and successful outcomes. Ready to explore how the T&M model can fit your project? Contact us today to discuss your requirements and get a clear roadmap tailored to your business needs.

To Quang Duy is the CEO of Newwave Solutions, a leading Vietnamese software company. He is recognized as a standout technology consultant. Connect with him on LinkedIn and Twitter.