Popular types of IT outsourcing models and which one is best for your company?

Popular types of IT outsourcing models and which one is best for your company?

Outsourcing IT tasks is emerging as a smart choice for organizations to cut costs and increase efficiency, but choosing the right outsourcing model is important for a successful project. Learn more about the popular IT outsourcing models and how to make the right outsourcing decision for your business. Below is the breakdown of the top 3 IT outsourcing models and when it is right for your business. 

1. IT staff augmentation

What is IT staff augmentation?

IT staff augmentation is a remote cooperation model that allows businesses to extend their local team by hiring IT professionals from external resources. 

By leveraging the staff augmentation model, you have the opportunity to choose candidates only that fit your requirements and to reduce or increase your augmented team size whenever you need to. Many companies nowadays offer staff augmentation services that help supplement the in-house IT team with skilled technical resources for flexible periods of time, depending on your software development plan. In this cooperation, the vendor takes over all administrative and recruitment tasks, while your business can concentrate on the functions. Also, this model allows you to collaborate with your augmented team similar to the way you work with your in-hour developers and highly control your project.

When is it best to choose staff augmentation? 

Staff augmentation is a good choice when your project already has a team of developers in-house but still needs to extend your team. 

It can be hard or impossible to hire the right developers from your local markets due to the shortage of labor markets or the stack of professionals is rare in your country. Staff augmentation is right for you to scale up your team and fill the expertise gap in your team if your software project requires specific technical knowledge. 

2. Project-based outsourcing

Another prominent outsourcing model in the IT industry is project-based outsourcing. In this model, the outsourcing company manages every part of the software development project according to your requirements. Your outsourcing partners will handle all the processes and deliver the final product to you. The project-based development model is built on a variety of full-spectrum project development cycle models from project definition to deployment and post-development support. This typically involves having to first explain the full requirements of the project to members of the outsourcing vendor, such as project managers and business analysts, and they will then be responsible for forming the development team and carrying out project management, and implementing quality control.

The big benefit of the project-based outsourcing model is that a large amount of work is taken out of your hands and you have more time and effort to focus on your core business. 

When is it best to choose project-based outsourcing?

The project-based outsourcing model is a good choice when the outsourcing projects are straightforward and unlikely to change the requirement. This mode best suits the short-term projects with strictly determined requirements and scope of work. You may have a clear idea and requirement for the product you would like to develop and once you have transferred to the outsourcing team, you are free to concentrate on your main function. 

3. Dedicated teams

A dedicated team model is a collaboration between the client and an outsourcing team of developers on a long-term basis. Unlike the project-based model, the dedicated team format allows for as much freedom and space for development as you need without overpayment.  This model gives your business access to a team of professional software developers that is allocated to your project and your project alone. In this way, you share the management of the project with the outsourcing partner. Your dedicated development team is selected specifically for your business goals and works similarly as your in-house team. 

Getting the help of a dedicated team is also helpful when you need expertise in a specific area. The team can provide the technical knowledge you need to help build an effective solution.

When is it best to choose dedicated teams?

The dedicated team model is suitable for complex long-term projects, which can expand in the future. 

It is also a good choice to look for a dedicated team when your business is in an early stage of start-up. This approach will help to build a team quickly, save money on the hiring processes and deliver the product faster. While your in-house team is left to work on business-oriented tasks, the augmented team does the additional  IT work.

A dedicated team is also suitable for a complicated long-term project that is still expected to grow. A strong dedicated team of developers is there to support your business along the way to the end of the project. 

So what is the best model for your business? 

There are several factors to consider when choosing the right outsourcing model for your business. Here are some of the important things to think about:

The amount of flexibility you need

The scope of the project

The skills and capabilities of your in-house team

How much time your project manager can spend on the project