Why IT Services Firms Must Rethink the Balance Between Time & Materials and Fixed-Price Models to Meet Evolving Client Expectations?



For IT services firms, the delivery model is a core strategic decision. Traditionally rooted in time and materials (T&M) engagements — known in France as régie — many IT services are now under increasing pressure to embrace fixed-price contracts.
But in a fast-changing, uncertain economic environment, is a full transition to fixed-price really the answer? Or should the focus be on rethinking the balance between these delivery models? And how can platforms like Napta support this strategic shift?
For years, T&M has enabled ESNs to allocate resources flexibly, with billing based on daily rates. However, this approach is now showing signs of fatigue:
Despite these challenges, the 2025 Consulting, Audit & IT Services Industry Report confirms that T&M remains relevant — particularly in contexts of innovation, uncertainty, or loosely scoped initiatives. In these cases, T&M offers the agility needed to iterate and redefine scope on the fly.
Fixed-price engagements offer a more structured approach, focused on outcomes, milestones, and measurable results. For forward-thinking IT services companies, this model unlocks both commercial opportunities and operational excellence:
"Shifting to fixed-price or ‘outcome-as-a-service’ models repositions value around results, not time. With precise forecasting, rigorous staffing, and digital assets, we grow margins while capturing the full value delivered to our clients."
— Stephan Weber, COO, Bearing Point
That said, fixed-price delivery demands sharper operational control — particularly in forecasting, resource management, and risk mitigation.
Rather than abandoning T&M, many IT services firms are moving towards a more diversified portfolio of delivery models, blending flexibility and predictability:
Whatever the delivery model, success hinges on intelligent resource management — a space where Napta’s Smart Staffing™ makes a tangible difference:
The real question is not “T&M or fixed-price?”, but rather “how to maximise the value of both?”. In an environment defined by:
IT services companies must build contractual agility and elevate their strategic resource planning. These capabilities — more than the model itself — will define competitive advantage.
In 2025, IT services firms must strike a balance between economic rigour and innovation in their commercial approach. The key to long-term resilience lies in:
With platforms like Napta, IT services firms can orchestrate this complexity: building the best teams, adapting to the most relevant contract structures, and delivering measurable value to clients.
Interested in exploring how Napta can support your firm’s hybrid delivery strategy? Book a personalised demo to discover our Smart Staffing™ approach.