Outsourcing as an industry has been around for quite a long time, as businesses are always striving for cost-effective ways to manage a few business processes off-site. By taking different functions to a third-party service provider, enterprises can now focus on managing as well as optimizing the core areas of their business. By taking core functions directly in your hands, and Outsourcing the rest a major portion of overhead costs also reduces. Usually, software outsourcing partners provide offsite services at a lower cost compared to your decision to build it internally due to the diverse economic benefits that tag along with it.
IT outsourcing – the need of the hour!
Now is a great time for businesses to achieve their digital transformation goals by reducing costs and maintaining a cost-savings approach. It is important for business owners to consider every aspect of their business, but there are a variety of benefits of teaming up with a software development outsourcing company. Working with a skilled and multi-disciplinary outsourcing firm will help your labor costs, opportunity costs, and improve execution speed.
- In a digitally competitive world with little or no room for error, speed to market is essential. Having a dedicated software development team with relevant experience in top-notch project management will allow your product to be ready way ahead of the brand challenges and competition.
- The best part about software outsourcing is that businesses can focus on mission-critical tasks that are of utmost importance in running the business. More and more resources can now be devoted to sales, marketing, and business development. Businesses also can work on a project-to-project basis, so that there is little pressure to keep developers on the payroll once the product is complete.
- In a 2018 survey of American CIO’s, it was revealed that finding the right IT talent is extremely difficult. By way of outsourcing developers, without wasting time, companies can find immediate access to well-qualified candidates.
A peek into the top IT outsourcing models
Now that you have decided to outsource your software development it is extremely critical to understand the different unconventional models on display.
1.Gain control over your project with the Staff Augmentation model
Also known as the extended development team, this model allows the business to maximize the efficiency of your in-house team while having total control over your project. You are borrowing your outsourcing partner’s engineering talent to integrate it into your in-house team. Businesses will also retain the overall responsibility of the project under this system as the outsourcing engineers will act upon the business strategies set by the client and not its own company. It is one of those models in which the client or the business maintains the highest form of control.
Advantages of the model
- It helps in faster time to market and rapid iterations as you do not have to expend time looking for talent. The outsourced partners will give businesses additional bandwidth to create products efficiently.
- It is also powerful as one can access great talent without paying full-time salaries. There is a huge saving on recruiting, onboarding and turnover costs. Businesses also save on office space, hardware, taxes, and downtime. Due to these savings, the overall development costs also hit low which is good news.
- The model offers the highest levels of flexibility. Scaling the team up or down implies putting in a request to your outsourcing partner.
- There is no headache when it comes to recruitment. The staff augmentation partner will be sure to provide the best talent pool and you merely have to conduct interviews to decide. There is zero recruitment risk as the partner will ensure the best comes to you.
- You can also lay your hands on the best IT engineers and IT experts in the world without the need to construct hefty pay packages.
- Once there is more bandwidth, with the right expertise and fresh ideas coming along the board, innovative ideas will surely flood the project.
Check out the ten reasons to hire Indian developers under the staff augmentation model of outsourcing.
2.The dedicated software team model for shared control
This model is also known as the managed team model grants access to the top team of highly skilled software development experts. In this model, business and the outsourcing partners share responsibility for project deliverables. It is an intermediate outsourcing model that falls in between the concepts of staff augmentation and a fully outsourced model.
Under this model, the managed team is allocated to the business and its project. The managed team will work independently of the in-house team with an outsourced project manager who manages the team’s day-to-day process and workflows. The project manager regularly reports and meets the in-house project manager or the product owner.
These teams are usually cross-functional wherein the roles can range from Scrum Master to Back-end developer, QA specialists, and much more. The team’s composition can be adjusted according to the project to achieve optimum results. This model is unique in the sense that the outsourcing partner shares both risks as well as responsibility for the project results.
Advantages of the model
- Considering that the ownership of the deliverables remains with the business, a managed team model lets you retain control over the entire development process.
- You will also experience the benefit of an exhaustive and well-laid out SLA and statement of work that clearly specifies the scope, deliverables, and quality.
- The model also frees businesses from managing the project on a day-to-day basis. The inhouse manager and the outsourced project manager take care of the process depending upon the agreed-upon protocols.
- There is hardly any ramp-up time for the managed team. Communication, as well as coordination, also are better considering the understanding with which project is delivered.
3.Project-based outsourcing model
Also known as the software outsourcing model, in this model, the software outsourcing partner manages the entire process in accordance with the specifications mentioned at the start of the project. This is a more traditional and hands-off compared to the other 2 models we saw. When businesses have their projects in which their core expertise does not lie, they can hire a software outsourcing provider that can fully manage the development process on the agreed timeline. With this model, businesses retain the least control but can get updated about the progress of the project at regular intervals.
Advantages of the model
- The project-based outsourcing model has clearly-defined timelines and deliverables before the association begins.
- The model is best when you do not want your in-house team to commit any time for the project. By outsourcing the project your team’s time and attention can be diverted towards high-focus projects.
- Businesses will get maximum results with minimum efforts.
- Although businesses are responsible for initial documentation of requirements and specifications, the outsourcing partner is overall responsible for the execution and delivery of the project.
Which type of IT outsourcing model is right for your business
Being a business owner, you have to analyze all the aspects of the project with the outsourcing vendor. It is extremely important to look at the below-mentioned points which will help you associate with a credible outsourcing partner for software needs.
- Comprehend your needs effectively
- Check technology expertise and passion for technology of the partner
- Important to read up about the partners to check reviews and market reputation
- Understand if they are customer-centric
- Check if the outsourcing partner fits in your requirement for budget and size
- Check the financial stability of the outsourcing partner
- Understand the software development model they follow
- Trust in terms of product reliability and future support and maintenance.
When you have answers to all the observations above, you will automatically be able to understand which model is the best one for you.
Understand the nuances of custom software outsourcing with our well-rated blog and gain an edge by understanding its fine workings.
Why does Chapter247 fit your outsourcing plans?
Our IT outsourcing services help businesses in reducing costs and gain expertise, flexibility, and scalability. We assist them in jump-starting their growth and achieve high responsiveness to shifting market trends. For our clients who outsource the processes not core to their mission is a preferable option. We provide models that let them move from complex and non-operable IT environments.
We are uniquely placed to provide IT outsourcing solutions because of
- Expert skills and domain expertise
- Global reach
- Unmatched business focus
- The recurring use of emerging tech
- Transparent communication and effective deliberations
- Timeline specific
- And a lot more
Chapter247 has handled complex outsourcing projects over its working tenure. Discover how we worked as an outsourcing partner to firms spread globally to deliver solutions within the defined time limits and budget.
Our team is excited to hear from you.