In simple words we can refer it to a certain occupational task of an enterprise handed over to a third party vendor on a contractual basis located mostly in another country.
The Outsourcing service is growing at a higher speed because it keeps reinventing itself to keep pace with varying technologies that facilitate outcome based business services.
The pursuit to drive business value through outsourcing was primarily focused on cost-cutting and this will remain a key motivation but the results of Deloitte’s global outsourcing survey 2016 indicates that or driving innovation into the enterprise solutions development company is becoming a vibrant pathway.
According to Gartner group’s report, global cities are categorized into Tier I, Tier II and Tier III based on numerous factors such as the quality of infrastructure, global connectivity, and availability of human capital and in order to rank the best places to set up an offshore R&D location.
The report concludes that cities like Bangalore, Yerevan, Mumbai, Ahmedabad, Bucharest, New Delhi, Hyderabad, Ho Chi Minh city, Chennai, Pune, Indore, Noida, Gurgaon, Thiruvananthapuram, Greater Toronto Area, Ottawa, Montreal, Haifa, Tel Aviv, Dublin, Lahore, Kiev, Minsk, Moscow, and St. Petersburg would be the ideal places, and hence ‘Tier I’ cities to offshore R&D.
Dedicated Hiring Is Regarded To Be The Best Model
Dedicated hiring is regarded to be the best model of engagement in comparison to your in-house human resource. As a matter of fact, it confers flexibility in picking your skill resource as and when required.
Furthermore, it saves you from running behind freelancers that lacks commitment and dedication most often and even saves you a great deal of cost as well as offer guarantee that the excellence in work delivered is of outstanding quality.
After an initial inquiry, the offshore agency engages in requirement analysis and provided you a detailed report with terms and conditions for Hiring Dedicated developer & accordingly you can hire a team of individuals committed to you.
There are benefits in outsourcing specific business tasks and processes.
Here you go with some benefits of Offshore Development Team:
Freedom to Focus on core Business concerns
When Workload increases with additional non-core task then the quality of your core actions suffers as your business develop.
Outsourcing in such circumstances to a third party vendor plays a crucial role by permitting your key human resources to focus on most important business tasks
Access to skilled expertise
One of the prime motivations for an enterprise to opt for outsourcing services is when it requires skilled people to carry on a particular task to offer a high quality product and service to the customer in the ever growing competitive era.
Hire dedicated developers’ works on a wide spectrum of projects with clients coming with unique issues and requirements.
This assists in sharpening their skills and consequently offers you enhanced results compare to an in-house team that lacks versatile approach to different set of projects due to the lack of exposure.
Capitalizing in-house efficiency
When a task or a project is outsourced, an enterprise can successfully utilize the internal resources as the workload of your human capital is being shared by an outsourcing partner and this allows you to develop your domestic task force and use them more competently.
Time Zone Advantage
The cost-cutting advantage is one of the benefit and the other benefit is the time zone differential between your country and the location of your offshore country.
Outsourcing project to a country like India provides you the additional advantage of round-the-clock business operations.
Your outsourcing partner can handle the task even after your staff go home and revert it for review the next day.
Any project would demand considerable cost on hardware and software. In majority of the cases, no special hardware is required but at least it’s essential to spare a terminal for your in-house development teams.
On the software side, most of the tools may be open source but still there is some professional software that needs to be installed for better results.
Even maintaining an Infrastructure is in itself a burden and most certainly when you hire dedicated developers, you have to incur no such overhead expenses.
The ultimate advantage of outsourcing is to achieve a competitive edge in the market and as every business carries a certain amount of risk; so in such cases a competent third party vendor well versed in their areas of expertise can easily handle the market competitions, government regulations, financial conditions, and changing technologies.
The mentioned advantages are rewarding enough to make a move towards off-shoring and the statistical trend proves it.
Now let’s have a look at some key services that are being offshore in IT sector:
- Mobile App Development: Seasoned coders to UI/UX professionals and experienced testers. You should hire iPhone developers, Android developers, Xamarin developers, UI/UX designers, mobile-specific testers in case you need skilled professionals in mobile development.
- Website Development: Team of remote back-end and front-end coders, designers, and testers, along with a manager. A graphic designer for your team; someone to be responsible for software GUI, website UI/UX, or graphic materials for online presence.
- Enterprise solutions development: Skilled team of experts to manage the over-all function of the project requirements from concept to installation.
This process involves evaluating the client’s needs, hardware and software required to meet project goals, studying the client’s current infrastructure, installing the hardware and software at the client’s site(s).
In a bid to harvest the advantages of outsourcing many a times company act in haste but it’s very important to keep in mind that the company setup differs from one to another, depending on their needs and goals and so the engagement models are.
If you have planned to outsource, it is important to understand the working pattern of outsourcing models to take full advantage of the benefits and mitigate potential risks.
An engagement model is a structure that defines collaboration between a client and an outsourcing vendor. It defines a level of control and accountability, as well as facilitates a base for a healthier relationship development.
So the burning question is that how do you select an engagement model that suits for your business needs?
Here is a brief introduction of the most popular models common in current times.
1) Fixed cost Model:
The name indicates that a fixed cost model is one where the price is set in stone.
It is summarize in the client’s proposal what needs to be delivered, when and what the costs will be of the assigned task.
It is most effectual when the scale and specifications of the software development project are plainly defined.
- It is a pre-negotiated cost based model so budget won’t exceed.
- The clear task specifications make the project look better.
- At the project assessment stage itself, the product is separated into the individual tasks. So, you can see the workflow that gives a sense of transparency before it starts.
- There is limited communication, which may result in unsatisfactory deliverable.
- There is zero flexibility as everything is laid out in the contract.
- There are scope-related risks, as any modification in the assigned project will result in an alteration in the price.
2) Time and material model:
With time and materials, clients have to pay for the hours used up on a particular assignment, not for the specific services that are described in fixed cost projects.
This engagement model is engaged when the total effort cannot be predictable in advance and the range of the job can be altered at some stage in the development course.
- It provides you the flexibility to change the requirements, without having to modify the agreement.
- One can have a full freedom to access the reports of the development stages.
- It simplifies the project specification amendment as per the market needs.
- The price varies based on the time and effort used.
- The client’s concentration is on the hours spent not on the outcomes and that affects the quality of the work done.
3) Dedicated Hiring Model:
In this model, the outsource company provide the skilled employees to the clients that will be able to complete the project assigned by the client and meet their requirements fully.
This model is usually used for long-term projects; where requirements are indistinct and scope changes frequently and even the client’s in-house team lacks skills or expertise in specific areas.
- Best skilled experts’ availability worldwide
- If you can choose the right company & pricing model, you can decrease development costs by 60%
- Dedicated teams decrease a product time-to-market by 37%.
- Pay as you Go model to reduce investment
- 24/7 support to clients for their ever changing business needs
- Replace a team on urgent basis if not satisfied with the ongoing progress
- Low efficiency for short-term projects
- Hiring dedicated developer is supposed to be more expensive than other available model
- To pick-up the right team for a particular task is time-taking equation
- Lack of client participation derails the whole project
Apart from these many companies also prefer to handover the task to the freelancers but it’s an admit table fact that freelancers will save you $2/hour but you risk having a low-quality product at the end, Threat to Security and Confidentiality and stretched delivery time frames too.
So by looking at all the pros and cons we can say that from all the models established in the industry nowadays, the most sought and preferred engagement model in year 2016 is ‘Dedicated hiring model’.
But working with outsourcing firm is also tricky sometime and that’s why you should consult an experienced vendor who will define the scope of your project, suggest the most effective pricing model and employ IT outsourcing best methodologies and practices to deliver high-quality product.
The Final Words:
Select BR Softech as your offshore partner
BR Softech has built a reputation of being one of the leading web, game and mobile app development company having headquarter in India and sales offices in USA, Canada, UK and Australia.
We’ve converge a team of dedicated, passionate developers designing market niche innovative solution for business houses that yearn to enhance their business development through techno-platforms like web development, mobile applications and E-commerce.
BR Softech Pvt. Ltd. excels in providing cost-effective IT Solutions. Established in August 2010 with over 10+ years of rich experience. An Apex rated IT serving company around the world. Our team of innovative and creative designers deals in web designing, mobile/ software development and other digital marketing services intending to deliver outstanding digital outcomes.