5 Must-Know Healthcare IT Engagement Models

An IT engagement model is a framework that determines how a vendor offers IT services to clients. It basically shapes the relationship between a client and IT services provider.

According to a research paper, the three key components of engagement models include project management, IT governance, and linking mechanisms, that aid companies take right decisions and execute them accurately.

Engagement models, in the context of providing healthcare IT services, not only includes software and equipment, but also human resources as an IT staffing service for companies. There are majorly five healthcare IT engagement models that are popularly used, and are discussed in brief below.

1. Fixed-Price Model

Fixed-price model, also called as the lump sum model is ideal for engagements with clear scope, stable requirements, and set delivery methodologies. Fixed price contracts are suitable for IT staffing companies who are looking at long-term goals.

Companies tend to prefer this type of model as it allows them to control costs and transfer the risk to service provider. Additionally, healthcare IT staffing agencies use several other types of pricing models which are as follows:

a. Fixed-Fee Pricing

In this case, a flat amount is charged for services depending on the hours worked. Companies prefer this type of pricing as it’s easy to understand and compare pricing models of competitors.

However, it’s not a flexible system, if workload expands, so does the number of hours, meaning IT professionals are still earning the same for more hours worked. Further, this isn’t a practice model for companies looking to grow larger in the coming future.

b. Project-Based Pricing

This model is same as that of fixed-fee pricing, but payment is based on the project, rather than on the number of hours worked. This works best for companies with clearly stated services with a defined beginning and an endpoint such as website development.

Here too, healthcare IT professionals may end up working for more hours on a project, while earning the same amount. This pricing model is excellent for agencies which focus on fast-paced work with quality outcome.

c. Hourly Pricing

This is one of the simplest pricing models for healthcare IT staffing companies. Hourly rate is decided for each service and clients are charged with the number of hours worked at the end of the month.

Staffing companies need to consider non-billable hours that can cut down profits. Consider using time and attendance systems to record hours worked on a project. Downside of this model is that it isn’t suitable for large projects, and it doesn’t appeal to clients that don’t have a flexible budget.

2. Time and Material Model

The next healthcare IT engagement model is time and material, and this model is gaining popularity for IT/software development projects. Time and control model allows for more control over the development cost, instead of taking a guess at expenses and overpriced charges.

Healthcare IT staffing companies agree to provide top-notch candidates for clients which are trained in specific skillsets. Time and material model bills clients for work based on the hourly rates. Staffing companies charge clients for the amount of hours spent on a project, along with material expenses.

Time and material model is ideal for:

a. Complex large projects

b. Solution design

c. Research and consulting assignments

d. Support and maintenance contracts

Further, time and material model is suitable for long-term projects, where project scope isn’t known fully, and for projects that need flexibility for varying workloads.

3. IT Staff Augmentation

IT staff augmentation is a type of outsourcing model in which companies rely on staffing services or outsourcing vendors to fill-in positions. However, there’s a difference between IT project outsourcing and staff augmentation.

In case of outsourcing, companies don’t have a direct control over projects and risks involved are shared, whereas in staff augmentation there’s still significant control over a team.

Through IT staff augmentation, gaps in workforces can be filled up quickly, and is a useful model for expanding a team. Tech talent can be hired from a vast candidate base, for long or short-term projects.

Furthermore, staff augmentation model allows companies to pay staffing agencies for what they need, in order to save money overtime. Hiring temporary employees is cost-effective as compared to recruiting full-time. This model saves ample of time spent in posting jobs, conducting interviews, documentation, payrolls, and other hiring tasks.

4. Dedicated Team

In a dedicate team model, staffing company provides healthcare IT professionals to the client for long-term basis. These professionals are chosen as per demands, skillsets, and experience. The client usually manages the team for his/her side, or assigns service provider’s manager to coordinate communication. The team generally works from provider’s workspace.

The dedicated team model has a transparent and simple pricing system, in which monthly payments are managed as per team size. Salary is composed of staffing agency’s fees and professional’s payments, along with overheads if any.

The main goal of dedicated team model is to hire a team to compensate for the lack of  necessary expertise and work seamlessly as per demands.

Pros of dedicated team model include defined and predictable budget, full control over team management, and deep understanding of business goals and client’s projects. This model isn’t suitable for short-term projects, and can be expensive as compared to the time and material model.

5. Managed Services

Managed service provider (MSP) is a third-party company that manages temporary worker recruitment and contingent talent base. Managed service providers offers a range of services such as management, analytics, and recruitment.

Further, this healthcare IT engagement model provides greater access to the right fit talent, which otherwise is a challenging task for hiring managers. Managed service provider is reliable, as a company can expect IT professionals with specific skillset.

Small and medium companies benefit immensely from managed services as they’ve a limited workforce and are in a need for more workforce to shoulder responsibilities. Additionally, managed services are cost-effective as there’s fixed monthly charges, instead of hourly pay.

Which Model to Choose?

Which one is the best model to use? This is a frequently asked question, thus to determine the right engagement model analyze at which stage project is currently, and then decide if niche skills are needed to fast track the project. This is a more direct approach to decide which engagement model to use.

Choosing the right healthcare IT engagement model is essential to ensure success of an organization/company. Arkenea provides IT staffing solutions with flexible engagement models to meet your staffing requirements, and help achieve your professional goals. Get in touch to explore and learn more about it.

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