Detailed Guide on IT Outsourcing & Its Models

January 27, 20229:44 pm

This type of model is suitable for your business when deliverables and expectations are fixed and decided without any further changes. If the project goals and objectives are defined, the fixed time period will not be exceeded then this is the type of model you should go for when outsourcing your software development needs. This is where you know that your skills are not matching with the need of the hour. For this, you can give your requirements to a software development company and get the entire project outsourced. Software development outsourcing refers to the process of contracting a third-party company to create software solutions for an organization. This allows organizations to access specialized skills and expertise, as well as reduce costs and increase efficiency.

software development outsourcing models

It pays to know the models and setups you have available to you. Simple projects have pre-determined needs that are unlikely to change.A project-based outsourcing company can complete these tasks without your input. Project-based outsourcing is when your development partner oversees and manages the whole process based on your specifications.


The cap gives you some sense of your project’s scale, plus it can be a good model for your first project together with a given software house. CIO magazine suggests that outsourcing to Vietnam is about 90% cheaper than developing software in the United States of America. Compared to India, developing software in Vietnam costs between one third and one-seventh times cheaper. Deloitte stated that the top 3 benefits of outsourcing realised by businesses are enabling focus on core functions, providing cost-cutting tools and solving capability issues. In this guide, we’re explaining the types of IT Outsourcing Models, their pros and cons, and how to choose the right model for your project. 1 project manager, 1 business analyst, .NET developers and architects, test automation engineers, DevOps engineers.

software development outsourcing models

Today, it is not only strategic facilities that are concerned about security. Retailers, universities, hospitals, and plants need a robust security system. However, with a lack of cybersecurity expertise, such companies prefer outsourcing security measures to third parties. You might face certain risks, like problems in communication, delays, features implemented differently from your expectations, and some others. Modern trends reflect the present-day reality and influence the industry dynamics, some of them are new, some are rising, and some are ongoing.

Unfolding the IT Outsourcing Price Models

Only then will you be able to invest in custom software development that would eventually result in an innovative, robust, unique, and quality product. Moreover, determining your markets would also let you make the best team out of the software outsourcing companies coming your way. Performing your own research using search terms related to your particular project type and niche can help provide you with additional potential outsourcing partners.

The limitations that one might have had to outsource your software development cross-country do not exist anymore due to the advancement in technology. When done correctly, outsourcing is the best way forward for any business. This is easy enough to understand some outsource software development benefits, like cost reduction and better efficiency. But there’s something more that makes US companies fulfill their 920,000 open IT positions elsewhere.

Technical Support

Instead of relying on one software development company, people are nowadays opting for multiple vendors to leverage their knowledge for the different phases of the project. The firms don’t need to hire a developer team and train them for the projects. The development becomes significantly easier by handing over the project to external professionals and experts. When using an offshore vendor, companies can take advantage of the vendor’s expertise and experience, while ignoring its location.

  • Decide on the convenient communication channels with the outsourced team.
  • Generally, nearshore outsourcing is for mid to large companies that can shoulder the higher developer costs in exchange for easier communication and a potentially higher-quality development team.
  • Reduced ramp-up efforts and costs.Your managed staff does not require any time to get up to speed.
  • Their previous achievements improve the chances of your project succeeding.
  • Together with the vendor decide on KPIs to track the performance of the outsourced team.
  • Conducting technical training and ensuring the availability of the latest tools and their certification will be quite expensive, and the total cost of software development may overreach the set budget.

Working hand in hand like one team is what we offer our clients and expect from them in response. In recent years, Ukraine, Poland, and the Czech Republic are among the fast-growing destinations for offshore IT solutions. Aside from advanced technology, robust infrastructure, and affordable costs, the communication with software outsourcing companies from these countries is smooth and collaborative.

Streamlined project and team management

In our company, we deal with time zone differences on a daily basis. That enables us to be in touch with our customers and benefits the mutual understanding. Operate- Development of products, project management, maintenance, and product support occur during this phase. Companies aren’t tied to working with one particular outsourcing provider over the long-term. If the project is low-maintenance, there’s no need to arrange retainers.

software development outsourcing models

These contracts can help keep the partner motivated beyond the terms of the fixed bid or T&M contract. Managed teammeans that the client and outsourcing provider share the team management responsibilities. Unlike an augmented team, which works more like an extension to in-house personnel, a managed team outsourcing software development is an entity having its own autonomous frameworks and management. Historically, the decision on whether or not to outsource IT requirements has been influenced by, both internal and external, economical, technological, and security factors. However, in recent years, confidence in outsourcing has grown.

Ensuring Tech Innovation

The process is designed to ensure seamless and efficient delivery of projects, right from the requirement gathering stage to post-deployment support. One of the key reasons why Binmile is a great option for software outsourcing is its Global Delivery Model. With offices located in India, the USA, the UK, and Indonesia, Binmile offers its clients the best of both worlds with its unique Global Delivery Model – local presence and cost-effectiveness. Not every aspect of the project needs to be handed over to an external team, outsource those that just need the expertise you lack and if you lack enough team members to work on certain points in a project.

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