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Seamlessly Move from T&M to Fixed-Price Managed Services with Project Transformation

Moving from time and materials (T&M) to fixed-price engagements offers benefits like shared accountability and risk, better cost insight, and increased control over development needs. However, the transition process can be unclear. ALTEN Technology can help you evolve partnerships with our proven project transformation process.

Your pursuit of efficiency and excellence has changed the way your business works with engineering services suppliers in recent years. First, you consolidated your approved supplier list to focus on a few strategic partnerships. Now, you’re looking to change the way you work with your partners. You’ve done the math on time and materials vs. fixed-price engagements, and you prefer to work with partners that share project accountability and risk through deliverable-based engagements. However, the path from T&M to managed services is unclear—and not all engineering service providers are capable of providing the high-quality managed services you need.

ALTEN Technology excels at providing managed engineering services and is uniquely positioned to provide structured support for clients that want to seamlessly transition from T&M to fixed-price managed services. We have decades of experience in supporting our clients through both staff augmentation and managed services engagements. In fact, we have delivery centers that exist to execute managed services projects with QMS certified to ISO 9001/AS9100 and ISO 13485 as well as teams standing by to execute work. For larger, global programs, the international ALTEN Group ecosystem enables us to effectively and quickly ramp up team sizes of 1,000+ to support a complete deliverable transformation process.

ALTEN Technology has a proven, established process for transitioning clients from T&M engagements to managed services:

  1. Identify the need(s)
  2. Establish the team
  3. Execute, monitor, and validate work and related estimates
  4. Develop a work unit catalog (if required)
  5. Execute the catalog, independent SOW, or both

The transition process enables the client to choose between types of managed service engagements: catalog-based development, individual statements of work, or a combination of both. In catalog development, also called a work unit-based engagement, ALTEN Technology works with the client to develop a “menu” of work units for the client to choose from. This gives the client granular insight into each work unit’s cost, making it great for drawing or specification updates, testing, design updates, software features, and more. With individual statements of work, the client receives deliverables at a set budget and timeline determined before the project starts.

Transitioning from T&M engagements to managed services provides a host of benefits:

  • Access to a large, scalable talent pool: ALTEN Technology owns the resource allocation on the project and can use expertise from any ALTEN office locally or globally.
  • Shared risk: Unlike a T&M engagement where you manage the complete workload, risk is shared between the client and ALTEN Technology in a managed service engagement.
  • Increased partner accountability: Rather than only providing straight labor on an ongoing basis, ALTEN Technology is committed to providing specific deliverables for a set price. ALTEN Technology also provides regular, frequent communication about each project’s status.
  • Better visibility and confidence in the cost of the program: Rather than simply being billed for hours worked, a managed services engagement offers a set price up front, guaranteeing that you will receive deliverables at a known, controlled, and predictable cost.
  • Improved control of your development needs and priorities: A managed services team is solely focused on achieving the deliverables in the timeline agreed upon at the beginning of the engagement. Unlike a T&M engagement, the team and its members cannot be pulled into unrelated tasks that distract from the project’s goal.

One of the best parts of our project transformation capabilities is that new and existing clients can leverage them to gain the benefits of managed services. If a new client isn’t used to managed services, we can begin our partnership with T&M engagements with the plan to take steps to transition the engagements to managed services in six months to a year. For existing clients, we can review our portfolio of support and discuss if there is a better way for ALTEN Technology to assist the client. For example, if there are 20 people supporting a client in a T&M engagement within the same project or department, there is a high likelihood that we could execute the project more efficiently in a managed services engagement.

We’re currently working on project transformation with several large clients in multiple industries. One medtech client has been working with us in a T&M engagement for its software needs; however, as we’ve learned more about the client’s system and scope of work, we’ve transitioned to executing individual, SOW-based software update projects. Another medtech client requires verification testing on an as-needed basis. Rather than retaining a T&M team for testing in perpetuity, we’re working with the client to develop a catalog from which the client can identify the number and magnitude of test needs, and then ALTEN Technology can provide the client with a confident fixed-price estimate for each test need. In the automotive industry, we’re working with a large OEM to transition work that was historically being executed as a T&M engagement to a combination of independent SOW and catalog development for a range of the client’s needs. In aerospace, we’ve been working with an aerospace manufacturer and have successfully transformed from mainly T&M projects to managed services, including projects in quality assurance and lean manufacturing.

Ultimately, ALTEN Technology’s proven process for transforming T&M projects to fixed-price managed services provides a host of benefits that support our clients’ success, including increased access to expertise, reduced risk, more partner accountability, better visibility and confidence in the cost of the program, and improved control of development needs and priorities. If you’d like to gain these benefits and more, get in touch to discuss how you can leverage our high-quality managed services.

Rachel Sellers

Rachel Sellers

Marketing Content Writer

Rachel Sellers is a marketing content writer at ALTEN Technology on a mission to make technical content that’s clear and easy to understand. In her eight-plus years of creating content that distills complex ideas, she has partnered with numerous subject-matter experts to create actionable content for several industries, including aerospace, medtech, UAV, and automotive. Rachel has a bachelor of arts from Regis University.