IT Outsourcing Models Comparison

<p>Different models of outsourcing became a staple business practice. How does it work and why do so many companies prefer it to in-house teams? Where do you even begin?&nbsp;</p>

11 / 07 / 19

Current State of Software Development Outsourcing

Enterprises choose to different models of outsourcing for a variety of reasons. The most obvious one is easily the low labor cost. In addition, there are such advantages as flexibility, the expert talent pool that you don’t have to hire, and general time savings and productivity. While it looks like the perfect strategy, you have to keep in mind the potential risks. Communication issues, along with hidden costs and loss of control, are major drawbacks. But it’s not as scary as you might think.

Outsourcing of software development is undoubtedly on an upward trend. According to the Coding Sans research, 66.6% of companies that needed software development used outsourcing firms during the last 12 months. That is an increase from last year’s 54.5%. The development process has evolved and improved in quality. The risks can now be mitigated almost completely by simply choosing a reliable provider.

The 2018 Deloitte Global Outsourcing Survey has established that majority of businesses see competitive advantage as the main benefit of outsourcing. As many as 93% of companies look for cloud-based solutions with technology being the main industry sector of the respondents. Cybersecurity and custom enterprise software are also among the main areas of interest.

Average hourly rate by country

Two Sides of Outsourcing Models

Different types of outsourcing models provide customization to the practice. Not everyone requires a brand new application, some businesses only want to enhance their team to do routine maintenance. As a result, there are distinct models available for different needs:

  • Project-based model is the most suitable when you know exactly what type of job you want done and have specific requirements in mind. The whole development side is covered entirely by the outsourced team.
  • Dedicated team is best suited for projects where some oversight is necessary. If the requirements can change or some additional input will be needed this model is a smarter choice. 
  • Staff Augmentation means the integration of outsourced talent into an existing team. This approach gives the employer the most control possible. It is also the quickest and cheapest approach out of the three.

Book a free consultation and we’ll help you make the best choice for your business.

Assess your requirements to choose the right option for you. Each has its own advantages and disadvantages:

outsourcing models pros and cons

How to Get Started

If a company wants to outsource the development it can be confusing to decide where to begin. With so many services, methodologies and expertise, it is easy to feel overwhelmed. To pick a provider that is suitable for your specific objectives, you should know how to look for it.

  • Decide what you want. The specifics of the tasks, the model you want to employ and the budget you are ready to invest. If you’re not sure, book a consultation.
  • Make a shortlist of the companies you are interested in. Check directory websites like or just ask your business partners for recommendations.
  • Do a background check. See what they released, their reputation, and if possible determine if the provider is stable from a financial standpoint. 
  • Evaluate the knowledge and skills of the team. Analyze the technical expertise and what stacks they use. See if they developed anything similar to your idea.
  • Introduce yourself. Send the potential partner an email. Tell them about your project. Most firms offer free consultations.

Outsourcing Models in Our Company

We utilize Agile methodology, meaning that they always have an insight into our work process and are free to make suggestions at any point. Even after the project is done, we offer ongoing support to make sure you stay happy with the results.

In addition, our company has all three of the models of outsourcing. Working with our clients, we always discuss the demands and expectations. If they know exactly what they want, that is perfect. But if they aren’t sure what approach to choose, we are always ready to help. We get an in-depth understanding of the business in order to help the client make the right choice. 

What Are You Waiting For?

Contact us and we will tell you everything you need to know about our practices. Schedule a meeting and tell us about your idea.