IT firms move to fixed-price projects

The contribution of time and material (T&M) contracts to information technology (IT) firms’ revenue has been on a declining trend, reflecting a growing shift toward fixed-price. This transition is driven by evolving industry dynamics, customer preferences, and technological advancements.

In a T&M contract, clients pay service providers based on the time spent and resources utilised. This model provides flexibility for clients but often limits margin improvements for service providers. Conversely, fixed-price contracts involve a predefined cost for a project, regardless of the actual resources used.