In the IT outsourcing process, you must decide which IT outsourcing model is the best suitable to your project. The type of IT outsourcing model is crucial, because it affects client-vendor contracts, which include terms of cooperation, project timeframes, pricing, and other regulations. In this article, VNEXT Global suggests 4 IT outsourcing models that you should know and choose one of them to apply to your project.
4 Types Of IT Outsourcing Models For You To Choose For Your Outsourcing Project
1. Fixed-price model
2. Time-and-material model
3. Dedicated team model
4. Outstaffing model
So, what are the differences among them?
1. Fixed-price Model
In the fixed-price model, the IT outsourcing services are agreed on at a fixed price. Therefore, you need to clearly, thoroughly define all the requirements at the beginning of software development. Any changes, or modifications, or adjustments after making the final price decision would incur additional fees. The fixed-price model is suitable for simple, short-term projects, because you can know and estimate perfectly all the features and requirements.
Some characteristics of fixed-price team model
- Budget is predictable.
- Changes during the development process are impossible.
- Timeline is easy to set.
- Client involvement is very little.
- Cost is fixed per project.
2. Time-and-material Model
The time-and-material model allows clients to actively, deeply take part in the project management. You can propose or require as many changes or modifications as you want until the final product meets your expectations.
Time-and-material model is suitable for long-term, complex projects, whose requirements are not perfectly clear at the initial stage. However, the cost for this kind of model can be high, it typically is charged at an hourly rate. The longer the project is, the higher the cost is.
Some characteristics of time-and-material team model
- Budget can be reevaluated (increase or decrease) during the project.
- Changes during the development process are possible.
- Timelines can be adjusted.
- Client involvement is regular.
- Cost is based on the hourly rate of each member. The payment is due monthly..
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3. Dedicated Team Model
If you, as a client, choose the dedicated team model, you would have a comprehensive software development team to carry out your project. That team usually includes front and back-end developers, QA engineers, UI/UX designers, project managers (PM), and any other roles if needed. For example, VNEXT Global provides the dedicated team model, which carries out all software development steps, from analysis to maintenance.
Depending on your project requirements, you can require your IT vendor to scale the team up or down, or to change some team members.
Some characteristics of dedicated team model
- Budget depends on the number of staff, hourly rates, and project duration.
- Changes during the development process are possible.
- Timelines can be adjusted.
- Client involvement is constant.
- Cost is paid monthly for the entire team.
4. Outstaffing Model
The outstaffing model allows you to add only some particular specialists, engineers or developers into your in-house IT team. In this model, the outsourced IT staff would work full-time under your supervision. Outstaffing is a type of staff augmentation, in which clients want to augment their team capacity or hire in-need workers.
Some characteristics of outstaffing model
- Budget is fully under the client's management.
- Changes during the development process are possible.
- Timeline depends on the clients.
- Client involvement is constant.
- Cost is based on hourly rate.
Final thought
Depending on the needs of your business, choose the right IT outsourcing model. It may be easy when you hear about it, but in fact, types of IT outsourcing models may have a major impact on your IT outsourcing deal. Therefore, be careful to choose the most suitable one.
If you are looking for a trusted IT outsourcing company in Vietnam, VNEXT Global is the ideal choice. With 14+ years of experience, we surely can help you to optimize your business digitalization within a small budget and short time. Currently, we have 400+ IT consultants and developers in Mobile App, Web App, System, Blockchain Development and Testing Services. We have provided solutions to 600+ projects in several industries for clients worldwide. We are willing to become a companion on your way to success. Please tell us when is convenient for you to have an online meeting to discuss this further. Have a nice day!
