A complete guide to IT outsourcing models

A complete guide to IT outsourcing models

Assembling an in-house development team makes sense when you have the money or can attract skilled expertise. Outsourcing works well for practically everything else. Many IT outsourcing models now provide so many possibilities that it’s simple to become overwhelmed. Some organizations offer turn-key services, while others offer to boost your staff with programmers. Some companies will assign you a Project Manager while others will not.

What is Outsourcing?

Outsourcing is a typical business practice in which a firm employs a third party to execute services or tasks that the company’s employees would otherwise perform. Although it was initially identified in the early years, it has become a vital aspect of global company management. Indeed, outsourcing services might be the ideal option for any firm in any industry, as it is a leading business practice with numerous benefits.

IT outsourcing is the business practice of using external technology providers to handle information technology functions such as infrastructure solutions, software support, disaster recovery, network services, software development, or QA testing.

IT Outsourcing Models

While different types of IT outsourcing appeal to other geographical locations, the outsourcing business model determines how you interact and your final goals. You should choose a collaboration model before signing a contract with an outsourcing business. Here are some of the most popular IT outsourcing models.

Dedicated team model

The vendor offers you a software development team that focuses only on your software development in the dedicated team model. Testers, developers, business analysts, and project managers are part of a dedicated software development team. The main advantage of hiring a software development team is that you will get a team and a project manager. As a result, you won’t have to take on the burden of development. Also, even in the middle of a project, you may quickly enlarge the team.

You will have more time to focus on the important things because a dedicated software development team is managed by a separate leader and only tracked by your tech lead during the main deliveries.

Staff Augmentation Model

Using the staff augmentation concept, you can add skilled developers to your internal team. This will help your in-house development team work more efficiently and effectively. These contractors become an extension of your in-house team and collaborate with your employees. You can maintain complete control over the project by using this outsourcing technique. The staff augmentation strategy may be ideal if your development process is too long, you lack scarce or sophisticated talent, or you require 1-3 professionals to help the project rather than the complete team.

Project-based model

You won’t have to be active in the project development process if you choose a project-based model of relationship-based outsourcing, except for the handover and delivery times.

It is the most common outsourcing model, effective for projects with little stakeholder participation. The biggest disadvantage of this model is that you will have no control over how the project develops. You will need to set the tone and frequency of communication with the project manager given to you by the outsourcing provider to ensure smooth communication.

Fixed-price model

A fixed-price approach is appropriate for projects with a specified scope and requirements. The service provider and client agree on a fixed budget and deadline for the development ahead of time. This model guarantees a stable budget regardless of the development resources used.

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Bottom line

Depending on your project objectives, each IT outsourcing model is excellent and effective. So, if you want a moderate level of involvement, a dedicated development approach is the way to go. The staff augmentation model is what you need if you deal directly with software development while also expanding your present team. If you need to work on a short-term project, you might also explore a project-based outsourcing strategy.