A Complete Guide on Choosing the Right Software Outsourcing Model

Being a business owner, if you have any excellent project idea that can be profitable to your organization but you don’t have enough resources for its creation or don’t want to invest your resources in it, you can opt for software outsourcing.

There are different engagement models available when it comes to software outsourcing. In this blog, we will go through all those models and help you understand which model is best suited for your project.

What is the Software Outsourcing Engagement Model?

Software outsourcing is nothing but a strategic partnership where two parties decide to work together on a project. If the strategy is implemented correctly by the software development company then they can provide a perfect solution to their clients. Proper planning in the software outsourcing process is very essential as it keeps the software developers ahead of time and is on the same page with the clients.

To accomplish this, it is very important to understand the software outsourcing engagement model. The engagement model in outsourcing software development is a framework that defines the collaboration between the software outsourcing company and the clients. It specifies the responsibility, level of control, and also provides a base for relationship development for the near future.

Why Choose Software Outsourcing Engagement Model?

Choosing the right software outsourcing engagement model for your project can give a successful final product and profitable output. For instance, when a software developer is working on a big project with a software outsourcing model that is more preferable for small projects then it can turn into a disaster. But if the developers choose the correct engagement model, then it can give the best quality software solution to the clients.

Types of Software Outsourcing Engagement Models

Let us have a glance at the three main types of software outsourcing models and learn in detail about them.

1. Time & Materials

Time and material software outsourcing model is gaining a lot of speed in the past few years. More and more software development companies & clients are choosing these models. This model is based on the concept that if the stakeholders cannot work on the big projects, then they can hire software developers for a specific time period.

Basically, the time & materials software outsourcing model means that the clients are completely involved in the project. The client can decide which feature needs to be given the highest priority and then can ask the developer to create it accordingly. The developers can also need to regularly check the functioning of the project at the end of each iteration.

One of the biggest advantages for the business owners is that they can change the requirements of the project whenever they want and can pay only for the time the software development team spends working on your assigned task. Besides, the main trade-off of the time & materials model is that the budget predictability is replaced by budget flexibility. Even after having an estimation of the project budget, the business owners cannot figure out the actual spending till the end of the project.

However, with the time & materials model, the business owner can back out of the project after each iteration. The time & materials model is a better choice for the fast-changing environment of blockchain technology and web app development. With this model, the business owner can react in real-time and the project will have less time-to-market.

2. Fixed Price

The second type of engagement model is the fixed price model. It has a classic approach to software development. It is exactly what its name says. Being a business owner, you get a fixed price for the project and there is no need to pay more than that.

To get a fixed price for your project, you need to have all the information about your product in advance. You must be able to communicate that to your software outsourcing company in detail and clarity. Once you sign an agreement with the software development company, there can be no changes in the requirements. And if you want changes then it will be cumbersome to change the request process and you will be charged additional fees for it.

The biggest advantage of the fixed price model of software outsourcing is that it allows planning. If the organization has a limited budget for the project then this model will help it go through all the requirements and understand what suits the project best according to the budget. And if at any chance the project goes beyond the decided budget, it relieves the monetary risks.

3. Dedicated Team

The dedicated team software outsourcing engagement model is your best when someone is looking for a long-term collaboration on a big project. Here the custom software developers will develop a complex product from scratch. The dedicated team model is by far the simplest model to explain and work with.

The business owner will hire a team from the software outsourcing company. The team can include software developers, QA engineers, project managers, and designers. Then comes paying a monthly fee for it.

With a dedicated team model, the client can retain the most control over the software project and get the work done. The business owners don’t need to handle the issues related to recruitment, infrastructure, or administration. Besides this, as you know the business organization is controlling the project so they have to be fully responsible for the project and they need to dedicate a required amount of time to check the project.

A dedicated team model is one of the safest methods for the project that works with blockchain technology and real-time applications.

How to Choose the Correct Software Outsourcing Model for your Project?

The selection of the right software outsourcing engagement model entirely depends on the type of project the business organizations want, the budget they can afford, the estimated deadline of the project, and most importantly the preferred state of software outsourcing. The business owner needs to have a proper understanding of all the engagement models, only then he can choose the best-suited model and software outsourcing company for his project. In this, even the software outsourcing consultants can be hired to help the organization take the decision.

Conclusion

If you are thinking of outsourcing for your software development project or you are a developer of an outsourcing software development company who needs help out the client to decide on which type of engagement model to go for, then this blog might help you out. But one should understand that choosing the software outsourcing model depends on many factors like project size, project type, budget, available resources, and the time limit of the project creation.