When the in-house talent is scarce and scaling up cost is steep, companies tend to outsource their tasks and projects. While some businesses outsource entire departments, others hand over isolated functions such as the IT sector, to third-parties.
According to the Environmental, Social, and Governance (ESG) industry survey, between 2018 and 2019, 38% of organizations have a shortage of IT infrastructure and skills. ESG survey also reported that 53% of organizations have scarce cyber security skills.
The situation calls for casting a wider net through outsourcing. Many organizations have already taken this route. In 2018, small businesses spent 7.8% of their total IT budgets on outsourcing IT functions, as per the Computer Economics study.
IT outsourcing has two main models, (1) Dedicated Team Model and (2) Project-based Outsourcing. It often becomes difficult for organizations to choose the right team for their project. Both models have their pros and cons, and one decision can mean the difference between a successful and failed project.
The dedicated team model is also known as the “hourly” model. Sometimes, it goes by the name of “time and material” model as well. Essentially, the dedicated team model allows you to hire full-time web developers through a software company.
As the name suggests, in the hourly model, dedicated developers are either paid hourly or get monthly salary as other full-time employees. While the dedicated developer reports to the hirer, they work from the office of the dedicated team provider.
Outsourcing companies may either form an entire development team for your project or may also work with your in-house web developers. This strategy is also called IT outstaffing or IT staff augmentation.
Task assignment is the company’s decision based on the requirements of the client and the expertise of the developer. The best thing is that the company scrutinizes the best developers and assigns your projects to skilled professionals.
Pros of Dedicated Team Model
- When you have deadlines to meet, and there is excessive workload, dedicated developers come as a blessing. They make sure to complete your tasks on time with quality assurance.
- You may hire dedicated developers for the maintenance of your completed websites.
- With the hourly model, the control of your project remains in your hand.
- You don’t have to explain the project requirements at the initial stage. You may provide details at different stages as the work proceeds.
- Since you have the control, you can easily identify and fix the mistakes that may appear.
- Another perk of the dedicated team model is flexibility. As your requirement changes, you may add or remove developers for your project.
- When you hire a team of dedicated developers, the outsourcing company uses its own IT tools and software to deliver a high-quality product.
- Dedicated developers assist you in development as well as extend product support.
Cons of Dedicated Developers
When you outsource your IT function, there is a constant need for communication with your dedicated developers. However, collaboration becomes difficult when your outsourcing company is based in a distant country or region. The difference in time zones and language barriers may become problematic.
Bonus Tip: Consider hiring a US-based IT outsourcing company to avoid such problems.
Project-based developers offer their services for a specific project over a short period. Project-based IT outsourcing involves the delegation of an entire project to a third-party developer(s).
If you are hiring project developers through an outsource company, you will have to explain your project requirements to the representative of the company. You may either have a meeting with the business analyst or the project manager. The concerned department will then form a team of project-based developers and monitor the project till the end.
You may also find freelancers or project-based developers on online recruitment websites, such as Upwork and Fiverr. Depending on your project and the skills required, you will find many developers at reasonable pricing. However, make sure to check the reviews and ratings before hiring a freelancer for your project.
It is important to understand that project-based developers work for multiple clients simultaneously. Unlike the dedicated developers, freelancers or project-based developers are not responsible for your project only. Do not expect them to give full attention as they split their time for different projects.
Pros of Project-Based Outsourcing
- When you hire project-based developers through a company, it relieves you of the workload and pressure.
- The outsourcing company takes responsibility for the entire project –from point A to Z.
- Further, the formation of a development team, carrying out the project, and quality assurance, all is up to the outsourcing company (with additional charges).
- Hiring project-based developers through an outsource company assure delivery of a quality product within the deadline.
Cons of Project-Based Outsourcing
Hiring a project-based developer requires you to provide complete details of your project at the initial stage, which can be difficult. Project-based developers do not assist in terms of maintenance and support. And if they do, you have to pay some extra money. There is a potential threat of overturning with freelance project developers.
Dedicated Developers and Project-Based Development: an Overview
- Dedicated developers are full-time employees who work from their company’s office. However, they report to the hiring company owner/manager. Project-based developers work on multiple projects at the same time and may not provide undivided attention.
- Dedicated developers work on an hourly or monthly payment structure. Project-based developers provide their services at fixed rates.
- In the dedicated team model, you don’t have to provide complete details of your project at the initial stage. On the contrary, the project-based developer may ask for a comprehensive explanation.
- Dedicated team developers assist with the development and product maintenance. Project developers don’t have any such liability.
- When you hire a dedicated team of developers, the outsourcing company itself vets the developers. However, the responsibility of vetting from a diverse pool falls on your shoulder in project-based development.
If you are thinking of outsourcing a project or IT function, make sure to weigh in the pros and cons of both models. Your decision should be based on the type of your project and the skills and expertise it may require. You may even incorporate both models for different projects.