There are three warring camps: outsourcing supporters, outsourcing supporters and dedicated team adherents. SpdLoad has figured out which of these business models and why is most effective in web and mobile development.
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Let’s Start with Outsourcing
Outsourcing – the transfer by an organization of a part of its production activities to non-staff specialists on the basis of an agreement.
Despite the fact that outsourcing has established itself as a promising way to optimize a business, the opinions of analysts on its account are ambiguous – and before rushing to introduce outsourcing into your business, it is worth analyzing its advantages and disadvantages in terms of production efficiency:
Benefits
- Saving time and money: the rate of a third-party specialist is usually much lower than a full-time employee. In addition, by refusing to hire new staff, you do not lose the time necessary for his training and adaptation, and save on additional payments;
- Focus on professional activities: outsourcing functions that are not directly related to the company profile helps to concentrate on core business and significantly increase productivity;
- A wide range of specialists: the search for specialists (especially a narrow focus) is usually hampered by the fact that you are limited by the city or region. Outsourcing provides access to an international staff base in which you will definitely find the right specialist who best suits your criteria.
Potential Risks
- Disclosure of confidential information: outsourcing implies the risk of disclosure of confidential commercial information. Even if the company with which you work has a good reputation, it is likely that it will be vulnerable to cyber attacks;
- Decentralization: organizing the work of remote employees is more difficult than managing the main staff. Ineffective management and lack of constant control can lead to insufficient transparency of production processes and unsatisfactory results;
- Cultural and linguistic barriers: cultural differences and linguistic barriers are the main reasons for ineffective communication that can lead to a decrease in productivity;
- Variability of quality: outsourcing provides access to a wide range of different specialists, among which you will surely find a developer with the necessary set of professional skills ready to fulfill your task for a low payment. However, it is easy to make a mistake with the choice of a specialist – do not forget that the avaricious always pays twice.
The main reason why companies decide to outsource is cost reduction and optimization. But experience shows that many customers are unsatisfied with the result, arguing that quality is not the highest priority outsourcing task.
However, even the most ardent opponents agree that in the era of economic globalization it is unreasonable to drive your business into a geographical framework.
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This is How Outsourcing Came About
Outsourcing is a business model that positions itself as an improved version of outsourcing, which has managed to significantly reduce the likelihood of risks while maintaining quality.
In outsourcing, hired specialists are not just a group of anonymous developers, but a full partner who remotely performs all the functions of a technical director. Specialists independently plan and control the software development process, are proactive in the selection and adoption of technical solutions and meet all your requirements.
Benefits
- Value orientation: outsourcing professionals are professionally interested in the operational solution of tasks and focus on quality;
- Involvement in the process: involvement and motivation of remote specialists is the key strategic difference between outsourcing and outsourcing, which ensures the guarantee of the result;
- Understanding the idea and business logic of the client company: remote specialists have a holistic view of how the final product should look and how much work, and make technical decisions in accordance with the client’s business logic.
Potential Risks
- Problems in project management: in some cases, a group of specialists (in the absence of an experienced PM) lacks effective control and coordination of work processes, which negatively affects the result.
Objectively, outsourcing as a business model looks more promising than outsourcing, given the fact that the cost of payment increases in proportion to quality. However, some businessmen are still unhappy, claiming that they have enough control over the development process.
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And Then it’s Time to Turn to the Selected Team
A dedicated team is a business model according to which a specially formed team of IT specialists from another specialized company works on a specific project of the customer.
In many ways, a dedicated team takes the ideology of outsourcing to a whole new level. Within the business model of the dedicated team, the most productive technical solutions are implemented and a highly qualified team of specialists is formed that are relevant specifically for your specific project.
One of the most important factors for the implementation of a successful project is a well-established communication with the client. Monitoring of progress in the implementation of the project and all aspects of development is carried out directly by the customer or by an appointed experienced project manager, personally approved by the customer. A dedicated team ensures constant quality control and transparency of work processes at all stages.
Benefits
- Cost optimization: a dedicated team allows you to reduce costs without sacrificing quality;
- Quality: cooperation with a partner directly interested in creating a high-quality product – a guarantee of a positive result;
- Stability: a dedicated team works only on your project and its composition, as a rule, does not change throughout all stages of work on a project;
- Full transparency: a dedicated team guarantees complete transparency of all work processes, which is provided by daily reports and detailed technical documentation, regular notifications of the project status through Trello and constant communication with the customer.
Potential risks
- Inefficiency in the short term: if your project is not too large-scale, and its implementation, according to preliminary estimates, will take no more than a month, it is likely that a dedicated team will become an economically unprofitable choice.
A comparison of the advantages and disadvantages of various business models leaves no doubt as to which business coin is most effective.
However, the final choice depends entirely on your motives and priorities. Before making a decision, you must determine for yourself a balance between payment and quality of service, and on the basis of this balance, choose the partner that best suits your requirements:
Outsourcing is a cost-effective alternative for companies that want to increase the efficiency of the production process by freeing full-time employees from small, routine and non-core tasks.
Outsourcing is the best option for solving problems requiring a value-oriented approach, stable control of the development process and reasonable payment for services.
A dedicated team is the best business model for the implementation of large and complex projects, providing direct control of all processes, a high level of quality and maximum absence of risks.
