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Software Outsourcing: Engagement Models

 

 
Outsourcing Engagement Models
Advantage
Disadvantage
Offshore Staff Augmentation More cost effective than opening one's own development center Tremendous overhead efforts is required
Offshore Dedicated Center (ODC) Eliminates ramp-up time between two projects and additional team ramp cost. Costly as client bears the burden of resource cost as well as cost of downtime between projects
Project Outsourcing Highly economical, freedom to select vendors depending upon your project's requirements. If poorly managed, overhead costs may end up making this engagement a costly affair.
Functional Outsourcing Usually has risk-reward payment model. High competition encourages vendors to bring in tools and techniques for achieving high level of performance. Requires domain expertise. Therefore, vendor selection is very critical.
Do It Yourself (DIY) Client has its own offshore development resources. Requires huge investment of money. Also, it is a time and effort consuming model.
Build Operate Transfer
Best model in Build model category. Economical in comparison to other two build models, also gives the advantage of running an already operating offshore development team.
Requires more investment than any of the buy models. 6 months or more time can be required in this model.
Mergers and Acquisitions (M&A) Client can build a highly matured offshore development team in a very short period of time. Requires money

There are different kinds of offshore software outsourcing engagement models: Offshore Staff Augmentation, Offshore Dedicated Center (ODC), Project Outsourcing, Functional outsourcing are various types of "Buy Models", whereas Do It Yourself (DIY), Build Operate Transfer, Mergers and Acquisitions (M&A) are different types of "Build Models". Every model has its own advantages and disadvantages. Depending upon the needs and financial constraints, companies looking for offshore software outsourcing can choose one amongst these models.

 

BUY MODELS

 

Offshore Staff Augmentation

In this model, an offshore vendor provides the clients with skilled people who meet the requirements of the clients. These people work exclusively for the client from the vendor's office. The client works directly with the resources, managing offshore resources on daily basis. The vendor, on the other hand, manages all other aspects of business, like recruitment, HR, infrastructure etc. This model is no doubt more cost effective than opening one's own development center. However, it involves a great deal of communication between the onshore and offshore teams. Therefore, this model usually does not deliver positive Return of Investment (ROI) because of the tremendous overhead efforts involved. HyTech Professionals LLC. can provide skilled, dedicated team members as well as all necessary resources and can help you in achieving positive ROI.

Offshore Dedicated Center (ODC)

This model is most suitable for clients having long-term forecasted need for a series of related projects. In this model, the vendor provides you with infrastructure dedicated for your projects as well as a development team that is managed under the vendor's employment rules. The drawback of this model is that the client bears the burden of resource cost and also the cost of downtime between projects. The advantage is that the availability of same resources for every project eliminates ramp-up time between two projects and additional team ramp costs. Contact HyTech Professionals LLC. as we have the capability of providing aaditional resources in a short time. Also, depending upon your requirements, we can provide you a seperate physical area or a floor in our office, and in due course of time, we can build a seperate, new building for you.

Project Outsourcing

In this model, the client identifies the project requirements and then identifies roles, responsibilities and expectations related to the project. The client then engages an offshore vendor to complete his project, keeping in mind the expectations and requirements of the client. In this model, the offshore vendor manages the project, whereas the client keeps a check on the quality of the project. Project outsourcing has many advantages. Unlike the above two models, it is highly economical. Also, if you are not satisfied with your present vendor or the present vendor holds no expertise in your next project's area, you can always go for another offshore vendor without any hassle. HyTech Professionals LLC. has both technical skills and efficient project management to deliver any project successfully as well as economically by ensuring proper managment of overheads like communication cost, travel expenses etc.

Functional Outsourcing

In this model, the client will outsource a function or application in which it has neither expertise nor resources to a third party which has expertise in performing the function. This model produces high success rate, as majority of functional outsourcing engagements have risk-reward payment model. Also, due to high competition, these type of engagements encourage vendors to bring in tools and techniques to achieve high level of performance. HyTech Professionals LLC. with a unique combination of domain expertise, technical skills and efficient project management can help you in achieving complete satisfaction in your functional outsourcing engagement.

 

BUILD MODELS

 

Do It Yourself (DIY)

A highly expensive, time and effort consuming model! In this model, the client does everything on its own: searching an offshore office, learning about Government rules and regulations, buying licenses and permits, going through the nightmare of hiring and training its employees and so on. And once the team has been formed, the client has to manage the team on daily basis,. This type of model is only suitable for very high profile companies that have the capability of investing huge amount of money. HyTech Professionals LLC. can help you in the initial management role by giving you access to senior level staff.

Build Operate Transfer

As the name suggests, this model comprises of three parts:

  • Build: The offshore vendor sets up the infrastructure and the team by hiring people
  • Operate: The offshore vendor runs the center for a defined period.
  • Transfer: Once the development centre is well established, the ownership and management is transferred to the client.

This model has many advantages. It gives the benefit of lower infrastructure cost, saves the client from all the nightmares of opening an offshore development centre on its own. Also the client gets the advantage of managing an already established team of developers. HyTech Professionals LLC. has a strong management team and hence can build and operate your offshore development team successfully before transferring a matured team to you.

Mergers & Acquisitions (M&A)

This is another popular model, where the client buys or merges a mature offshore development company. In this way, the client finds a way of building a highly matured offshore development team in a very small period of time. This model is again suitable only for companies that can invest huge amount of money and are interested in opening their own offshore development centre. HyTech Professionals LLC. can help you in finding the right candidate for this model.

   
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