Statista says that close to $288 Billion has been spent on IT outsourcing globally. Sources have said that most small businesses invest in IT outsourcing, with an investment of 6.1% of their budget. Midsized ones will invest 4.6% while large-sized end up investing 74% of their budget in IT outsourcing services.
The statistics above shows clearly how outsourcing services are being used largely across the world in either level of businesses. From the very small to the largest. There is always a valid reason to outsource IT services. Generally, outsourcing will help a business reduce its expenses, reduce the time it takes to get an app to the market and at the end of the day improve the business.
Much as outsourcing is used in the world, it is important to know the outsourcing models once you have made up your mind to outsource. The model is basically what defines the engagement between the company (client) and the outsourcing vendor. That is the level of accountability and control. It also takes care of a healthier relationship.
To choose the best model you should know the available ones and then get informed of all the pros and cons of each. From that, you can know which model to choose. It will, however, require a serious analysis as provided below.
These are the models available,
- Dedicated hiring model
- Time and material
- Fixed cost model
- Milestone based
- Build Operate Transfer
Dedicate Hiring Model
This model gives the client a close or even full-time control and coordination with the outsourced team. The model is very effective as it has flexible pricing. Dedicated developers are hired by many clients due to its ease of control and smooth running of the product.
When this model is used, the outsourced company will provide the client with skilled employees who are able to deliver the project as required. The model dictates that a complete team is allocated to the project, the project will also be allocated resources according to the wishes of the client.
The model provides a cost-effective solution to customers who require offshore support. Resources are always paid on a retainer basis under the model. The model is actually suitable for long-term projects. This model acts as a branch of your office. It is the best model due to the fact that you can control it and that it offers the required results in the best quality and within the shortest time possible.
Offshore project developers who are passionate about technologies will be aligned with the requirements of the client. Dedicated developers have the best knowledge of the project scope, therefore, delivering an app that has many features designed just for your firm. You will not be given “useless’ features when you use this engagement model for offshore projects.