When you need additional development talent, three strategies for outsourcing software development may come to mind:
- hire a dedicated team from an outsourcing company
- hire one specialist from a staff augmentation provider to join your local team (or remote team)
- a hybrid team—a mixture of both
These software development outsourcing models usually differ in terms of the type of final product, the type of contract between the two parties, and the scope of responsibility each party is assigned.
To help you decide which model is right for you to outsource software development, we will take a close look at these and explain when you might want to choose each one.
A dedicated team
When a complete external team is hired to work exclusively on a specific project, it is called a dedicated team. A manager at the hiring company communicates the vision and requirements for the project to the external team, which otherwise does its work and project management independently. A dedicated software development team is a good fit when a contracting business needs a team to focus fully on one specific software development project from start to finish in order to complete it as soon as possible. The dedicated team model is also a good fit if the contracting business does not have the time to manage the project or lacks the space and necessary tools to do so.
An outsourcing provider offers staffing flexibility, and highly experienced partners will regularly offer deliverables for review and feedback. These stage-end deliverables are also the basis for billing, rather than billing on a time and materials model. Alternatively, the outsourcing partner may use a fixed price model for the entire project. This is also known as a project-based model.
The outsourcing company will have its own culture, optimized for the work and personalities of the team members, so the team is likely to be able to get to work quickly on your project.
Staff augmentation means hiring one or more experts from an external provider to join your in-house team to work on specific tasks or projects. Staff Augmentation is a good fit for businesses that need to quickly scale up their team for a short period of time. For instance, if a company needs to complete a project that requires a specific skill set, but the in-house team lacks the technical expertise to do so, they can bring in between one and three external experts to fill that gap.
The staff augmentation model offers a cost-effective solution, as companies only pay for the services they need. It also provides quick access to specialized skills, as the outsourcing partner either already has the professionals on its staff or has the expertise to hire well. As a result, the extended team will be able to complete the hiring company’s project quickly. This is a good option if you have a temporary need for specific skills or if you want to test the fit of a potential employee.
It can be challenging to integrate personnel brought in through staff augmentation into the company culture because the external team members are not likely to be familiar with the company’s processes. Communication can also be a barrier even in cases of nearshore outsourcing, due to remote work, and there may be an issue with time zone differences if we are talking about offshore outsourcing. This makes it essential to establish communication channels and set clear expectations at the outset, which is still a good idea even if the situation involves onsite outsourcing.
Finally, the outsourcing partner has limited responsibility for the quality of the specialist’s work, and in an unexpected event such as an illness or the specialist leaving for a different job, progress on the project will be slowed considerably.
On the other hand, the hiring company’s project manager has complete control over the project and may make whatever changes are necessary to ensure its success.
Between the two models above is a hybrid team. In this model, management of the team is shared between the contracting and outsourcing companies. A hybrid team is a good fit for businesses that have multiple projects with differing requirements.
For instance, if a company needs to maintain an existing system while working to create a replacement for that system, it can hire a Hybrid Team to work on both projects simultaneously. This allows the external team members to understand the advantages and challenges posed by the existing system.
A hybrid team provides a high level of knowledge transfer and collaboration. As with a dedicated team, the membership of a hybrid team may be flexible, as the outsourcing partner may adjust the team’s size and scope throughout the project’s stages.
Hybrid teams may be composed of pairs of specialists, in which each specialist from the contracting business is matched with a specialist from the outsourcing partner. Alternatively, each company may contribute personnel in agreed-upon roles. This typically consists of analysts and testers from the contracting business working with developers and designers from the outsourcer. Either way, exactly—or very close to—half of the team works for each of the partners.
Software development outsourcing models—a wrap-up
Choosing the right custom software development outsourcing model depends on the specific needs of your business. Before choosing a software outsourcing model, companies should consider their budget, project scope, and timeline, as well as the extent to which their resources and the skills of their staff meet the needs of the project. A good outsourcing partner will have the expertise to advise you on your decision.