3 main outsourcing models for project development

Before using all the benefits of outsourced development, any company should think of outsourcing models. The choice will define the management level of the development process and the security level of corporate data. There are three outsourcing models. Among them:

1. Full process outsourcing

A provider of outsourced development manages the whole process of development, team organization, and product finalization. Moreover, it is responsible for product quality, issues and risks.

This model is optimal when your employees do not have a lot of experience and knowledge in needed software or you have many ongoing projects.

Advantages:

• Little or no management efforts for your company and more time to work on business tasks.
• High-quality results and delivery on time according to SLA. In case of late delivery of the project, there are penalties
• Vendor’s best practices.
• The vendor manages all the risks that are related to your project.

Disadvantages:

• You have less control over project development.
• The vendor sets up the project much slower.

To avoid such cons, you should always ask for regular meetings and reports from your provider. All your communication ought to be as transparent as possible.
 

2. Dedicated team

A vendor adds an outsourced team of developers to your existing in-house team. The outsourced team will only work on their part of a project. Thus, both teams share possible risks. The provider will manage the team, but their project manager will provide regular reports to your company, project manager, or product owner.

This model is optimal for companies that already have an in-house team of developers but lack expertise or resources.

Advantages:

• You will have a quick set-up of the project.
• As you have full control over project results, you will save time and effort.
• You will own the technical part of the project and get the outsourced team’s expertise.

Disadvantages:

• Possible miscommunication between two teams.

To avoid miscommunication, look for a vendor who knows how to work on the communication and development process. Also, do not forget about regular reports on the progress.
 

3. Staff augmentation

You will manage an outsourced team by yourself.  The model is optimal when you do not have employees with needed expertise or have a bit slow development process. Usually, the provider provides only several needed specialists, not the whole team.

Advantages:

• You will get only needed professionals in your project.
• The model works for long-term and short-term cooperation with the vendor.

Disadvantages:

• Your company is responsible for project risks.
• Possible miscommunication between in-house and outstaffed team members.

To avoid these cons, choose a vendor that will help you check the performance of their experts. If needed, solve problems that might arise from collaboration.
 

General precautions

• Sign NDA (Non-disclosure agreement). This way you will protect your corporate data from leakage risk.
• Ask a vendor to provide you all existing deliverables and access to their system where the vendor tracks the team’s progress.

Pricing models

• Fixed price. The provider calculates the price for their time and effort, and you pay for it on a fixed date.
• Time and Material. You pay only for those hours the outsourced team reported during the development process.