As much as software outsourcing has gained popularity, it is very difficult for the organizations to find the outsourcing companies best suited for their products. It is also extremely crucial for these organizations to select the outsourcing companies that are solution oriented rather than being focused on only performing activities that yield no results. To maximize the results of any project, it is important to select the outsourcing model that can match the budget and requirement of the product.
This article will dive into different types of outsourcing models, when they should be chosen and their pros & cons. The types of outsourcing models that we will be discussing today depend on the client-provider relationships.
So let’s get started!
1. Staff Augmentation Model
Most of the freelancing based organizations follow the staff augmentation model- this model allows the
organization to hire staff on-the-need basis. The organization looking for staff augmentation decides the skills that
they need to incorporate in their team and hire a resource based on the requirements. The staff augmentation
model can encompass different skill sets for the same project including quality assurance engineers, graphic
designers, marketing specialists. Network engineers, scrum masters and system administrator.
This model has numerous advantages including:
a. Cost efficiency
b. Easy recruitment
c. Advanced flexibility
d. Skilled resources from different regions
e. More control over project development
f. Talent expansion
2. Project Based Dedicated Development Team
This is a type of staff augmentation, but in this model, you hire a full team for a specific project. This allows the
burden of ownership to be shifted to the outsourcing company. Moreover, the cost of the development is decided
based on the hired team.
Most of these teams are cross-functional; the organization looking for an outsourcing company provides the
requirements and the outsourcing company provides the cost for the whole project. If accepted, the organization |
and the outsourcing company will decide the scope, roles, deliverables and timeframes. The management of the
project is two-sided; a project manager from the organization sends the requirements and the team lead in the
outsourcing company with his/her team translates these requirements in the form of code.
This model has numerous advantages including:
a. Advanced control over product development
b. Requires lesser time for management as opposed to in-house development
c. Lower ramp-up efforts to get the teams up to speed
d. Better communication among the team as they are already familiar to each other
e. Lower risk due to the team’s prior experience
Graphical Representation of Software Outsourcing Models
3. Multi-Vendor Team Model
Multi-vendor model allows the organizations to pick and choose the teams for different parts of the projects. This
model is followed by the organizations who are looking for absolute experts in all the project modules. For any
organization to follow the multi-vendor model, they must break down these tasks beforehand – backend
development, frontend development, UI/UX design, testing and maintenance. However, this model suffers major
problems with ownership and coordination. As the involved multiple teams only take responsibility for their own
areas, it could lead them to ignore the higher goals of the projects
This model has major advantages such as:
a. Suitable for agile projects with aggressive timeline or unable to find a team with the required
b. Unmatched technical expertise for all the areas of projects.
c. Effective timely delivery.
d. Technical Expansion.
4. Deliverable Based Fixed Pricing Model
Fixed Price Models are adopted by the organizations who have a clearly defined requirements and scope. This
model gives a sense of monetary security to the organization as they are bound to pay the outsourcing company at
the end of each deliverable. Most of these projects are long-term with higher costs thus serving as the motivation
for the outsourcing companies to dedicate their team for the whole project
This model has various benefits including:
a. Shared partnership with the outsourcing team as their delivery will allow the organization to pay the
b. Lower risk of loss
c. Covers all aspects from the project ideation to the end
d. Outsourcing team takes the responsibilities for the business requirement document (BRD) as well as they
take ownership of the project.
With this little guide, we have tried to help you decide the outsourcing model that you can acquire for your project. If you are looking to outsource your project, you can contact us here or email us at firstname.lastname@example.org for quality product and swift delivery.