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Project-based Outsourcing Model

Flexibility and the ability to adapt to the specific requirements of the recipient are the features thanks to which outsourcing is constantly developing dynamically. The emergence of many new outsourcing models has made it a solution for every company, regardless of its size, number of employees, or industry in which it operates.

Many companies indicate that the main advantages of outsourcing are the minimization of costs and the possibility of gaining a market advantage. It is true because outsourcing has become popular thanks to these advantages. But its flexibility and ability to meet individual customer requirements have made it a common solution. Of course, the above features are not the only advantages of outsourcing. In the article "Why Should you Outsource IT Project?" we have discussed this issue in detail.

Models of Outsourcing

There are many models of outsourcing; however, they can be divided into 3 main categories:

• Relationship-based,
• Location-based,
• Pricing models.

It is essential to understand that there is no better or worse outsourcing model, and each of these models has its supporters and opponents. When choosing a cooperation model with an outsourcing company, you must always put your expectations, preferences, and requirements first. Then you will quickly know which model of cooperation will satisfy you.

The article "Model of outsourcing" discussed the above division in detail.

Relationship-based Outsourcing Models

In the case of software development outsourcing, there are three most common types of outsourcing:

• Project-based model
• Dedicated Team model
• Staff Augmentation model

Today's article will focus on the project-based outsourcing model, which is very popular, especially in the IT industry.

The remaining models differ from each other both in the scope of cooperation and the level of responsibility. Staff Augmentation allows you to compensate for the staff or skills gaps in the in-house team by supplementing them with external employees. However, in the case of dedicated team outsourcing models (also called a managed team model), the outsourcing partner will provide you with a dedicated team of developers who will comprehensively take care of your project. You can read more about these cooperation models in the series of articles about outsourcing.

Project-based Outsourcing Model

The project-based outsourcing model is one of the most popular and accessible forms of outsourcing. It is used in almost every industry, but the IT industry has contributed to its popularity because it has never been so easy to create unique software by outsourcing development.

It is enough for you, as a client, to present detailed project requirements to the outsourcing company, and it will take care of the development process of the entire project.

Each stage of the project is on the side of the outsourcing company, it creates the development team and deals with project management. Your internal project manager will be in constant contact with the external company. Still, the scope of cooperation and the frequency of contacts is an individual matter. You will often receive a summary of the work progress and to what extent your company will be involved in the project.

Benefits of Project-based Outsourcing Model

All the features of outsourcing characterize the project-based outsourcing model and thus ensure cost savings, access to a vast talent pool, no risk associated with recruitment, and high flexibility and scalability. However, unlike other outsourcing models, the project-based outsourcing model has additional benefits:

Minimum Involvement of Your Team

Since the implementation of the entire project is the responsibility of the project-based outsourcing company, your and your team's participation in this project may be limited only to receiving ongoing reports on the work progress. Of course, if you want to get more involved in the project, that's no problem. All you have to do is set the terms of cooperation with the outsourcing company so that each party feels comfortable.

Responsibility on the Part of the Outsourcing Company

Responsibility for the implementation of the project lies with the outsourcing company. Of course, you are responsible for preparing the requirements and specifications. Still, you are not responsible for the execution and implementation. For many entrepreneurs, this solution provides excellent comfort.

Transparent Schedule

The outsourcing company is responsible not only for the implementation of the project but also for its timely implementation. At the beginning of cooperation, a clear work schedule should be established so that each participant knows when the key dates fall and the final date for completing the work. It will depend on your preferences whether the date of completion of the project will be tantamount to launching the product on the market or whether it will be the date of completion of development work and the product will be launched on the market at a different date.

When is it Worth Considering the Project-based Outsourcing Model?

When choosing an outsourcing model, remember that it should match our requirements and preferences, not the other way around. Therefore, treat the following points as guidelines to help you make the best decision.

You Have a Clear Vision for the Project but Need More Resources to Implement it

A clear project vision and detailed requirements are the only requirements for this outsourcing model. So if you know exactly what you need and can't do it internally (because, for example, your team doesn't have the time or the appropriate qualifications), be sure to consider the project-based outsourcing model. Then the implementation of the entire project will be on the side of the outsourcing company, and you will focus on other critical tasks for your company.

It is Not your Crucial Product

If your development team is focused on the core business of the company, it is better to outsource a smaller project to an external company. Then your in-house team will be focused on what is most important. Just supervising an outsourcing project takes little time and is not demanding.

You Need a Product Quickly

It is well known that creating a new product is a process that requires a lot of time and management. In addition, if you do not have the right specialists, you are condemned to the need to organize recruitment, which is time-consuming, and its results are not always satisfactory. Experienced outsourcing companies have the right teams and specialists on hand, and they also have extensive experience in various projects. For this reason, they can quickly create a new product and bring it to market.

The Outsourced Project is Simple

The project-based outsourcing model also works well when the outsourced project is relatively simple (e.g., creating a simple mobile application). Then the contact between the principal and the contractor may be minimal because there is no need to consider the intricacies of the project. Of course, a proven outsourcing partner can handle a complex project, but if this is your first cooperation, it will undoubtedly take a bit more time.

Conclusion

Outsourcing is a solution that may be popular among small businesses, startups, and large companies. Each company can find something for itself among the numerous outsourcing models. If you have an idea for a product but don't have the resources to implement it, the project-based outsourcing model is the perfect solution. If you are still unsure whether outsourcing will meet your requirements, read our article "Why Should you Outsource IT Project?"