What type of outsourcing is right for you?
There is no need nowadays for companies to enlarge their staff and hire employees to complete some peculiar tasks or projects. It is much easier and more convenient to use outsourced services provided to you by an outside company or freelance employee. Moreover, outsourced work can save you a lot of resources if you determine clearly for yourself which outsourcing type is right for you. In this article, we will dig deeper in the peculiarities of IT outsourcing infrastructure so that you could get to the market with your new product quickly while spending the least amount of your time, money and nerves.
Classifications of outsourcing
If this article were prepared for a scientific magazine, we would have to deal with dozens of different IT outsourcing services classifications. But we want to make it useful, first of all, for the entrepreneurs who don’t know which type of outsourcing to choose. Judging from the experience of American and European companies, the first step towards high-quality outsourcing is a proper formalization of all business processes. Some quickly growing and evolving companies can have a rather unstable business model that makes impossible applying of outsourced work. So before searching for an outsourcer, make sure you will not change the conditions of the contract because of the inner transformations of your business. When you are confident that your workflow is smartly arranged and for better results, you need to hire remote dedicated staff, we are happy to help you with that.
Read also: How to build a remote development team
Types of outsourcing depending on time given
And, first of all, let’s pay attention to the most valuable thing we always lack – the time. Depending on the duration of a service delivery, there is long-term and short-term outsourcing IT services. How to differentiate them? For instance, the hardware installation in your office is a short-term service, while system administration is a long-term service that can be delivered to you for years.
Types of outsourcing depending on the fullness of the service delivered
Depending on the scope of work delegated to the outsourcing company, we can single out two major types:
• full outsourcing services;
• partial outsourcing services.
Full outsourcing services represent a complete package of IT services provided to a company by an outsourcing enterprise. That means that the company or a person you hire delivers to you any IT service you need from a corporate website development to system administration and takes the whole IT department of your company under their control. Usually, for this kind of services the whole outsourcing company is hired as long as the number of tasks is 2too big for one person.
Partial outsourcing services usually include performance of one or several peculiar tasks by an outsourcer. In this case, an outsourcing company can join a team of a customer or work separately in order to complete some operation. This can be, for example, development of a corporate website or application, creating content for a client’s website, SEO and SMM promotion of a client’s site, etc.
Types of outsourcing depending on the model of relationships
Another classification of IT outsourcing services bases on the model of relationships between a customer and an outsourcer. Here, we can single out:
• functional outsourcing;
• outsourcing of human resources (outstaffing);
• strategic outsourcing.
Functional outsourcing presupposes performing of one or several certain tasks assigned to an outsourcer. In this case, an outsourcer takes the whole responsibility for the certain duties, previously discussed with the client. Functional outsourcing model is applied in mobile app outsourcing development types so that a contractor delivers a specific piece of work. A company has a website and wants to create a mobile application; no need to hire a whole IT department if you can order it from the outside resource. Or a different case, when you have a staff of developers that can elaborate a product, but you need a design for this product and testing of its functionality before the launch. You can hire a company that will prepare a design for your product and then assure its quality. When you outsource the staff, you hire a dedicated team of developers from an outsourcing company for a certain period of time to complete certain tasks. Therefore, you control the work and give assignments to the outstaffed employees. Strategic outsourcing is an IT outsourcing model when an outsourcer receives the whole control over your IT department. This IT business engagement model gives a contractor almost unlimited control over all IT processes in your company and the outsourced staff can work on your premises.
Read also: Enterprise mobile application development
Types of outsourcing depending on geographical position
In terms of geographical position, there are also different types of outsourcing. As you understand, in this article, “a customer” is mostly a company from North America or Western Europe, that’s why geography really matters. Here you can choose from local, nearshore and offshore outsourcing. While everything is clear with local outsourcing, nearshore and offshore outsourcing have some differences.
Nearshore outsourcers are, generally, located in Eastern and Central Europe, while offshore outsourcers are Asian representatives. According to this classification, the main difference between nearshore and offshore development teams purely lies in the quality of the delivered services. So that offshore companies from Asia, usually India, provide quite low quality of work and used to ship it after the deadline is already expired. Nearshore companies, situated in Eastern and Central Europe, with their approximately the same hourly rate and minor difference in time zones represent the best possible option for outsourcing services. Such division is quite subjective, of course, as long as anyone has a right to establish oneself in a good or bad way; and there still plenty of competent and not that much specialists both in Asia and Eastern Europe.
Read more: Ukrainian vs Indian developers
Types of outsourcing depending on business model
Every company searching for a reliable outsourcer usually faces the need of reducing the costs whenever it’s possible and find out what type of outsourcing is better the company. If you also try to find a way to pay less for the same quality of services, you should mind that there’s also another classification of outsourcing services. We can divide them into time-and-materials and fixed-price contract.
The time-and-materials type of contract enables full flexibility, and the contractor establishes an hourly rate with the client. That means you will pay only for the hours spent on the project development and you can suggest any adjustments and corrections at any stage.
Read also: Why Do You Need to Outsource Mobile App Development?
In fixed-price business model, the client pays for a final product, and it excludes any possibility of implementing any corrections to the project. If you are sure how the future product will look like and that your outsourcer is skilled enough to develop it in a proper way, then you can pick this model beyond all doubt. But don’t blame your developers if they refuse to change anything while elaborating the product, you will have to accept what they produce. Of course, all outsourcing companies offer both models, and fixed-price usually costs less than time-and-materials. The benefits of outsourcing models vary for different companies depending on the specifications of the client and the project.
Now, you have a bright comprehensive picture of IT outsourcing models and types. Erminesoft is one of those universal companies that provide a huge range of outsourcing services, and we will be happy to assist you on every step of the way. Before hiring an outsourcing company, it is essential to emphasize your business goals and needs, build a right outsourcing strategy, scan the market and opt the most applicable outsourcing model for your company and project peculiarities.
