IT firms opt for fixed-price contracts amid low demand

Clients cutting costs, demanding more efficiency, IT firms are going in for fixeed-price contracts

Indian information technology (IT) service companies are signing more fixed-price contracts with clients, to combat a slowing business in traditional services.
 
Software service companies traditionally billed clients on time and material or the number of people deployed on projects. Now, customers are cutting costs and demanding more efficiency. Wipro, Infosys and Mindtree had increased their revenue from fixed price contracts last year.
 
Cognizant saw marginal growth. For Wipro, third largest IT services company, fixed price contracts contributed 57.1 per cent of the revenue; for Infosys, it was 49.4 per cent, a nearly five percentage point jump.
 
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