It’s not always practical for a company to handle all processes that a project requires, especially if the core team is busy with a high priority task. That is one of the main reasons why outsourcing software development exists and helps companies all over the world. Today, we will look at the main forms it takes, namely the delivery models, and explore the problems of outsourcing and its advantages.
“The important thing about outsourcing or global sourcing is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.” – Azim Premji
So you’re at a crossroads and can’t decide whether you should spend money on outsourcing? Well, let’s quickly look at the benefits and disadvantages of outsourcing in general, to see if it’s right for you.
Consider the following: even if you have a great set of professionals working for your company, they can’t possibly have all the skills. Besides, there will always be key projects and the so-called B-listers, the ones you can put on the backburner, though still looking to get it done. In times when the experts don’t have the know-how to do a project or can’t afford to take work hours away from the main task, outsourcing is your loyal friend.
It often comes down to a decision between relying on your expert team vs time that they’ll have to take away from the main goal. Luckily, there are plenty of experts that you can hire for outsourcing, which makes the decision easier.
“If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.” – Lee Kuan Yew
Some people view outsourcing as an additional cost but it’s not necessary an extra expense. After all, if you were to assign a project to your team, you’d be spending money on the time they spend working and, if they aren’t familiar with the tech, on training staff, whether new or old. With outsourcing, you simply hire a competent team right away and waste no money on training or onboarding.
Plus, you can keep the company resources free while extending the scope of your side projects. And, you never know, the side task might become the one that bring you success!
Another hidden advantage of outsourcing is the space you save in the company offices. Instead of expanding to accommodate more and more employees, racking up rent expenses, you simply outsource to a different city, state, or country.
That way you get a full-sized team of experts without having to keep them all on deck. Moreover, since the team will be far away, they’ll be managed directly by their own PMs and leads. Thus, your managerial staff stays on point, curating the operations in the homebase while the outsource team runs pretty much self-sufficiently. You pretty much sign a time and materials contract and wait for a product to be delivered.
“Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower cost goods and services, causes economic expansion that reduces unemployment, and increases productivity and job creation.” – Larry Elder
There are three core delivery models that you can get when working with an outsourcing company. These are:
- time and materials
- dedicated team
- fixed cost.
Each has its advantages and disadvantages of outsourcing work and we’ll explore their merits step by step. Remember that all of these are fine and the choice should be made situationally, depending on your budget, timeline, and more.
“Master your strengths, outsource your weaknesses.” – Ryan Khan
Sometimes you know exactly what you want and Fixed Cost is the model exactly for that. You set the scope, the budget, and the deadline, putting tight control measures in place. Then, our team handles the management and development, staying in the bounds set by you. Most of the time, this is the lowest-priced model but it’s not exactly flexible.
We recommend using this if you have a solid vision of the project and want it done fast and specifically according to your requests. With extensive management and documentation on our side, you’ll see how the budget is divided and what work is done for the outsourcing project. If you value the work of your team vs time spent, outsourcing projects on the Fixed Cost model is a great way to keep your main staff free while getting the tasks done.
“The real power of outsourcing going forward is going to be that it increases an organization’s core capacity for change and growth.” – Michael Corbett
We recommend this model for your long-term projects that might grow in scope later on. Although it’s not the most flexible choice, it’s a great fit if you want an intricate project done at a reasonable price with full dedication from a set of professionals. All managerial duties will be handled by our PMs and you only have to set the approximate scope and budget. Plus, you can add a tight deadline if necessary, that’s what the team is there for!
Plan on creating an ambitious app and want it done fast? That’s exactly when the Dedicated Team model will come in handy. Conversely, a basic variation of a popular app doesn’t require much innovation and expertise, so you can opt for a different, lower-priced model instead.
Similarly, if you want a bit more on-hand control, there’s the lesser used option of the Extended Team. That way you get the pick of our experts and can manage them closely to ensure that they’re adhering to your vision and workflow 100%.
“As organizations increasingly make outsourcing an integral part of their operations, a new breed of professionals skilled in the design, implementation, and management of these complex business relationships has emerged.” – Michael Corbett
We love ambitious projects that evolve as they go, delivering breakthrough features and wowing the target audience. And we recognize that putting all of your resources into these can be problematic, especially if the development takes a while. In such cases, outsourcing on the Time and Materials contract will be just what the doctor ordered.
With the Time and Materials model, you have full flexibility and control of the project. There’s no need to set a budget or deadline up front and you can adjust the size of the team at any point in the process.
It’s a great choice if you have a goal in mind but feel ready to improvise and add features, changing the scope of the project. We recommend it for those who don’t want to fund the whole project up front, covering it step by step instead. A great choice for startups and companies that need additional workforce and want a reasonable price.
“Outsourcing has gone from being an intervention to today being an integral part of [the] strategy in most corporations.” – Michael Corbett
With our guide and our expert team’s outsourcing services at your disposal, we hope you’ll never have trouble tackling a project. We’ve covered the good points and the problems of outsourcing, so you’ve probably already settled on the approach you wish to take. Go ahead and take it with Incode Group!