Blogs/ TECHNOLOGY
6 Reasons why Retainer Agreements Work and how to pick the right one for your Business
Hiring a retainer team that works alongside your internal team is the way to go to keep your project on track and ensure timely and high-quality delivery with agile scrum development
What is a Retainer Agreement?
Simply put a retainer agreement is an ongoing agreement between a business and an agency, that assures ongoing services available to the business on-demand for a retainer fee. The retainer fee can be a lump sum amount for a project or a recurring monthly payment.
Retainer contracts can add immense value to your internal engineering team and in this blog, we’ll go over everything you need to know before signing a retainer contract including all the benefits of a retainer contract for your business, the different kinds of retainer agreements, a comparison between expanding your internal team vs signing a retainer contract and how to pick the right retainer agreement
6 Reasons why Retainer Agreements Work
An IT retainer contract can help gain stability in your projects
1. Deploy Agile Scrum Development
Retainer agreements use Agile Scrum development which is a sprint-based system. It helps deliver the highest value and most effective product development for complex projects and relies on incremental development. It focuses on building the most important features first and a continuous process where additional features are added and adjusted based on customer feedback between sprints. This is different since other development methodologies emphasize on building the entire product from start to finish and then have subsequent iterations to work on the feedback. Agile scrum development has several benefits like
- Faster and high-quality product development
- Promotes flexibility and adaptability
- Continuous and frequent development with quality improvements in real-time
- Frequent planning and goal setting for each sprint that increases productivity
- Delivers the highest business value in the least amount of time
2. Working with industry experts
Helps you add highly experienced and well-trained members in every tech stack to work as an extension of your team assigned based on the requirement of the projects.
3. Easy Scalability
Imagine having to scale your team and hire resources to meet project needs and timelines in a hurry. Now imagine doing that with ease. Retainer contracts allow businesses to maintain the continuity of a project, scale and adjust resources.
4. Flexibility
Scale-up and scale down your team size with resources that work different tech stacks. Retainer teams provide flexibility in adjusting the resources based on your project requirements on a monthly basis.
5. Ease of management
Easily split tasks between internal and retainer teams, leverage insights and best practices shared by the retainer team to set up and optimize processes.
6. Cost-effectiveness
Hiring a retainer team is a cost-effective way to keep IT projects on track, with reduced internal resources at low risk.
A comparison of hiring an in-house team vs a retainer team
Types of Retainer Engagements
Monthly Retainer
This is a variable model in which the business is charged a fixed fee per hour for the total number of hours dedicated to the project and any additional expenses incurred, for example, purchase of 3rd party tools are added to the fees. Generally, different resources, tech stacks, or services have a varied hourly rate. This kind of engagement offers greater flexibility for businesses to plan the number of hours and resources needed and extend the retainer’s scope that aligns with their monthly business every month goals.
Project-Based Model
This is a fixed model in which a business is charged a fixed sum for the pre-defined scope during a period of the project. This type of engagement is very useful for businesses when there is no deviation in the scope of the project.
Comparison of the different types of Retainer Engagements
The right retainer engagement for your business depends on multiple factors and here are a few high-level things that you should consider before picking a retainer agreement
Parting thoughts
The kind of retainer engagement your business needs depends on variable factors, for example, if it is a one-time improvement project a project retain would work the best or if it is a continual project with unclear goals and direction an hourly rate is recommended. In some cases finding a balance between the two is also required. Contact us for a free consultation and quote now!
