Software Development Outsourcing: Model Comparison

July 11, 2019
#Outsourcing #SoftwareDevelopment

Software development outsourcing offers a ton of options and because of that, it can be confusing as to where to even start. We’ll help you pick exactly what you need.

Current State of Software Development Outsourcing

Enterprises choose to use different types 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 on the surface it looks like the perfect strategy, you have to keep in mind that it has potential risks. Communication issues, along with hidden costs and loss of control, are all 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 the majority of businesses see the 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.

Another trend shows us that the narrowing of focus is also on the rise. This means IT companies pick their niches and mostly stick to what they do best. For example, one firm is brilliant with a .NET stack of technologies, another chooses cloud services as their things, while the third vendor specializes in exclusively healthcare applications. There really is a whole plethora of options to choose from so it’s not uncommon to see organizations have multiple software development partners for different tasks.

Average hourly rate by country

Two Sides of Different Outsourcing Models

An outsourcing model is a specific predefined approach that provides customization to this entire practice. Not everyone requires a brand new application, for example. Some businesses only want to enhance their team to do routine maintenance. As a result, there are distinct models available for different needs:

  • The project-based model is the most suitable when you know exactly what type of job you want to get done and have specific requirements in mind. The whole development side is covered entirely by the outsourced team.
  • The 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 external talent into an existing team. This outsourcing model 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. Determine whether your requirements are set in stone or can be adjusted and modified in the future. Decide what degree of control is feasibly required. Also, check your in-house team if you have one and chose whether you want to cover their weaker spots or provide them with an extra pair of hands. Each type of outsourcing has its own advantages and disadvantages that you can see on the infographic below:

outsourcing models pros and cons

How to Get Started With Software Development Outsourcing

If a company wants to outsource its software development it can be challenging and confusing to decide where to begin. With so many services, methodologies and programming languages, each different from the other, 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. Here’s a quick checklist of what you should do first before committing to a software development partner:

  • 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. They are often free and will educate you on what technical characteristics are most suited for the completion of your project.
  • Make a shortlist of the companies you are interested in. Check directory websites like or just ask your business partners for recommendations. If you aren’t sure what to look for, check out this article where it’s described in more detail.
  • Do a background check. See what projects they have released, their reputation, and if possible determine if the provider is stable from a financial standpoint. Keep in mind, however, that if you can’t find information about their past project or an established vendor has a modest portfolio, it’s not a red flag. It shows that most of their past work is under a non-disclosure agreement. These vendors take confidentiality seriously.
  • 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. Some technologies are good for a certain type of project while lacking for others. The vendor will happily tell you about the differences and guide you towards the one best suited to make your idea a reality.
  • Introduce yourself. Send the potential partner an email. Tell them about your project. Most firms offer free consultations. There is no harm in checking out what they can tell you, get a better understanding of how their process works, and maybe even establishing a partnership if you’re happy with your find.

Outsourcing Models in Our Company

In Digital Skynet we adhere to Agile methodology, meaning that the client always has an insight into our work process and is 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 of our work.

In addition, our company offers all three of the described models of outsourcing. Working with our clients, we always discuss their requirements 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 their industry and their organization in particular in order to help the client make the right choice.

In Conclusion

Software development outsourcing is a practice that is created to make the work of the client easier and more efficient. To achieve this purpose it has to be customizable. There are several types of outsourcing with each one of them geared for different purposes. The creation of software, in particular, has its own outsourcing models all of which are equally valid. Where you need a project-based development, a dedicated team or a staff augmentation, we are ready, willing, and able to help you out.

So, What Are You Waiting For?

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

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