Now that you have decided to outsource your project, you have another big thing to decide and that is the engagement model with the vendor. A software development engagement model is a framework that governs how a vendor provides IT or Software Services. In this fast-paced era, the demand for tech-savvy and top-notch software development continues. Since every brand’s requirement is unique to their organisation, there cannot be a particular engagement model for software development that fits all. So the success of software development outsourcing models depends on a suitable engagement model too. That is why brands must be first aware of the various types of engagement models that exist in software industry & they should know the pros & cons of every model & then decide on the right one which suits their business requirements. The engagement model depends on various factors like size, duration, budget & scope of the project.
Types of IT Engagement Model
Many outsourcing software development companies in India propose a fixed price, T&M, and dedicated team models. Let’s learn which IT engagement model is apt for each situation.
1. Fixed Price Model
This model refers to thorough planning, time, scope, and materials to be used. Based on this, the entire project development budget is decided. This particular model is often preferred by projects with a specified scope budget. In case of extra work (new features, add-ons, or services that haven’t been specified before), clients and software development providers tend to make additional contractual agreements.
- No Price Fluctuations – The customer knows from the beginning how much he needs to spend & the vendor company needs to follow strictly the timeline as scope & time are fixed. Both the party need not cover additional costs but only what is outlined in the agreement.
- Lower Risk Factor – According to the fixed cost project model, the price for developers’ work is stable if there is a detailed specification. Once the agreement is assigned, there is a strict deadline for the project delivery.
- Lack Of Flexibility in requirement – The model isn’t suitable for projects that need flexibility in requirements as once the agreement is approved by both sides, nothing can be changed.
2. Time & Material
Time and material is yet another engagement model in IT where the budget communicates the resources and time utilized for the project development. Here, the client pays for completing the tasks instead of guessing them beforehand. It’s wise for a software development provider to have proper know-how about the several changes involved in the process. Contrary to the fixed cost model, the T & M agreement possesses a more flexible schedule and budget. The client has access to control the resources spent on the present task and can make the necessary changes if needed. In this model, client has the flexibility to book a certain amount of hours of resources monthly for a certain period of time for their work.
- Uncertainty in project requirements is effectively handled.
- Scalable cost management and easy timeline modification.
- The model is not efficient for short-term projects.
3. Dedicated Team
Dedicated team IT engagement model implies that the software service provider offers their specialists to the customer based on their skills, competencies, and tech stack as per the project’s requirement. This type of IT engagement model is suitable for long-term emerging projects. You don’t require firm planning and it enables the client to switch and shift requirements, timeframe, budget, resources, and team size of any particular project. You also have full control over the implementation of your project. In this engagement model, it’s up to the customer to choose project management whether they will manage the dedicated team themselves or involve a project manager from the software vendor’s side. While the focus is on high-quality delivery, the pricing model is also very simple as per the dedicated team’s size and hourly rates of each resource involved. All you have to mind is monthly salaries and extra costs like service provider’s fee, administrative needs, etc. which are decided during the terms of the contract, as this will make up the billing.
- Hiring a dedicated team from an outsourcing software development company is much cheaper than recruiting in-house resources.
- No training and hiring costs, and it is easy to scale the team.
- The team involved in the project will be focused only on your project.
- The model is not efficient for short-term projects.
4. Technology Partner
Technology Partner is a software development company with significant experience and a team of specialists from versatile fields, including business analysts, solution architects, UI/UX experts, developers, quality assurance specialists, designers, project managers, and other roles required to deliver turnkey solutions.
Technology partner relationship is a completely different type of engagement model. Here the tech partner actually helps in complete end-to-end IT solution delivery including, IT Infrastructure consulting & setup, development till deployment. They decide the complete technology stack & implement this for you for a nominal cost.
- Technology partner actually acts as your partner in running your business cost-effectively by taking over all the technology loads on their shoulders & strives to offer the most cost-effective solutions to reduce your operating expenses. While they manage the tech, you can comfortably focus on sales & business management.
- Companies will be able to work with a wide range of resource pools to deal with all IT problems without losing their time.
- It will work only for continuous long-term development.
5. Build Operate Transfer (BOT)
The build operates and transfer model comprises of Designing, construction, and operation of the project with constant modifications and updates in requirements throughout the three stages. It’s a very comprehensive engagement model with all the aspects of SDLC including the maintenance under the same roof. Benefits The Client’s Day to day management attention is not required as project execution and reporting are covered in this model. Preview of services is made available to lessen the beforehand investments.
- Low building and operation risk, and employee retention.
- Works for bigger projects have high-cost factors.
6. Staff Augmentation
Staff Augmentation Model provides specialists to the client to work on their premises till the project reaches its ultimatum. The cost of project implementation, Hiring and recruitment is greatly reduced so that the client focuses on the core business rather than non-core process.
- Highly skilled experts at work.
- Flexibility allows the scaling of teams to optimize cost and time.
- Higher labor cost
- Culture adaption takes time
- Lack of resources pool & knowledge access.
Questions You Should ask Before Choosing the right IT Engagement model:
Before you decide to choose the right IT engagement model remember that there would be some barters.
Have a glance over a few crucial factors before handpicking a particular IT engagement model:
- Project Type: What type of project is it? Whether it’s an MVP project or a multi-faceted and complex solution?
- Flexibility: Would you opt for last-minute modifications or additions once you begin the project?
- Budget: You must streamline a budget to speculate the spending on the project.
- Duration: You also need to have project completion deadlines in place following that the product should be delivered to the end-user within a specified time.
- Supervision: Are you capable enough to lead the project development?
These questions and pointers can help you leap forward in selecting an appropriate engagement model in IT. It would turn out to be helpful to consider a committed team for long-term projects or a product vision requiring frequent updates and research-based efforts. When you have no specifications and goals pre-decided, you may consider hiring a dedicated web development company. When your in-house team lacks real talent and an actual workforce, you must hire dedicated software developers.
A complex software development project would require a more sophisticated IT engagement model. Numerous businesses seek to spend less and earn more. This manifolds the demand for cost-effective IT solutions in India. Additionally, this would require a dedicated team of developers. These models can pave the way to the advanced R&D model, which can deliver businesses greater possibilities of success and growth. And to achieve these mesmerizing results, team up with Smartinfologiks! A team of specialists including Business Analysts, Project managers, Developers, UI/UX experts, software testers, security specialists, and a flexible pricing model is at your fingertips so that you can look after only your business operations.