This model is suitable for clients who want to play a significant role in the project development process. As the model name suggest, the pricing is determined based the man hours required to complete the project i.e. hourly charging.
When the specification of project, scope of work and implementation of project plan cannot be effectively estimated during the initial phase, this model is the best option to choose and proceed with the development. This engagement model is particularly useful in contexts where the projects are prone to specification and design changes midstream. This model gives customer greater flexibility in terms of developing the project specification on an ongoing basis and modifying the specifications based on the changing market needs.
In this effort based pricing model, the project cost is a function of the project execution time and the corresponding resources deployed.