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Top Outsourcing Models and How to Pick the Best for Your Company

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Summary: Outsourcing software development is a smart choice, but choosing the right outsourcing model is critical for success. Learn more about the top outsourcing models and how to make the right choice for your organization.

Benefits of Outsourcing For Your Business

Outsourcing software development is a business trend that continues to grow. Full-time employees are expensive and offer little flexibility. Outsourcing software projects allows companies to both innovate and save money.

Also, by outsourcing software development, businesses can fill existing gaps in expertise and speed up large projects.

Outside development teams can work on customer-facing projects freeing up other employees to focus on new, innovative projects. Without the right talent, companies may miss out on lucrative opportunities.

Lastly, Hiring new developers takes time and so does training existing teams. Outsourcing software development is often a more convenient solution. Having too much work to handle is a good problem to have. But it’s still a problem. Recruiting outside teams takes away a lot of stress and allows for consistent growth.

If you’ve already chosen to move forward with IT outsourcing, you may be researching different outsourcing models and deciding which is best for your organization. Below we break down three of the most popular models and when they should be considered.

Outsourcing Model One: Dedicated Teams

The dedicated team model gives your business access to an expert team of developers. In this model, you share ownership of project direction with the outsourcing partner.

A dedicated team is allocated to your project and your project alone. The outsourced project manager manages the team. These developers work outside of your organization.

You and the team agree on responsibilities, time-frame, outcomes, and scope. Proper communication is important for guiding the project’s direction.

When to Choose Dedicated Teams

A dedicated team is a powerful outsourcing model. But you need to have an experienced in-house project manager. Ideally, they should have experience in a relevant area.

Getting the help of a dedicated team is also helpful when you need expertise in a specific area. The team can provide the technical knowledge you need to help build an effective solution.

With a dedicated team, you can remain in control of project direction and decision-making. This allows you to ensure that they stick to your vision.

Project-Based Outsourcing

Another popular outsourcing model for software development is project-based outsourcing. In this model, your partner manages the entire project according to your specifications.

Your partner will oversee the process and deliver the final product to you. You will also agree on a timeline upfront that the partner must stick to.

When to Choose Project-Based Outsourcing

Project-based outsourcing suits simple, straightforward projects that are unlikely to change. The outsourcing team then completes the projects without your guidance or input.

Project-based outsourcing is perfect for companies that have a clear idea of the product they want to build. Once you’ve briefed the outsourcing team, you are free to work on other areas of the business.

The project-based model works best for projects that are not your core product. Outsourcing the development of your core product requires more management and care.

Projects-based outsourcing contracts suit companies that have limited software development skills. Outsourcing projects to expert teams is easy and efficient.

Staff Augmentation

The staff augmentation model allows you to add expert developers into your existing team. This helps to maximize the efficiency and skills of your in-house engineers.

The staff augmentation model allows you to keep full control over the project. This is one of the top ways to outsource.

When to Choose Staff Augmentation

Choosing staff augmentation is best when you already have an in-house engineering team. It’s also important that you have experienced technical leaders to guide the project.

If your company has gaps in expertise, staff augmentation allows you to fill those gaps with expert talent. If a new project requires specific technical knowledge, staff augmentation can help you boost efficiency. 

Staff augmentation is great if you need to bolster your development team quickly. Hiring full-time employees can take time and isn’t always the most practical solution. Also, the tech talent shortage means it can take months to find the right developer.

Choosing the Right Outsourcing Model

There are several factors to consider when choosing the right outsourcing model for your business. Here are some of the important things to think about:

  • The amount of flexibility you need
  • How much time your project manager can spend on the project
  • The skills and capabilities of your in-house team

Different problems have different solutions. So start by identifying the problem you need to solve. These three outsourcing engagement models all provide different levels of flexibility. You should choose the one that fits your project requirements.

Time is another important factor. You will need to devote time to managing your outsourcing relationship. The project-based model requires the least time while staff augmentation needs the most.

The Best Outsourcing Models For Your Business

There are many reasons to outsource software development. It’s flexible, efficient, and cost-effective. Understanding these different outsourcing models can help you make the best decision for your business.

Dedicated teams, project-based outsourcing, and staff augmentation all have advantages and disadvantages. The best model for you depends on several factors. These include the size of your in-house team, the amount of flexibility you want, and the size of your project.

number8 specializes in staff augmentation outsourcing. We have 22 years of experience recruiting senior-level talent to U.S. based teams. If you’re looking to outsource your software development project, contact us today. We’re here to answer any of your IT outsourcing questions.

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