What is Offshore Software Development?

In simple words, outsourcing all development tasks or a part of them to a third party, like a software agency or developer is called offshore software development. The tasks can be outsourced to individual developers or an agency, by delegating the whole project or only particular parts or features, or by hiring an offshore dedicated team of developers.

Why should you get an Offshore Development Model?

With constantly changing economic conditions and variable business traits, it is extremely important to choose a flexible and transparent offshore development model. It helps in saving money and provides access to global talents. It will help the offshore company to deliver the project on time. Along with that, ideas and insight from different and more people will ensure better quality results. This will lead to the clients being benefited with the highest Return on Investment (ROI).

What are the different types of offshore software development models?

To know which offshore software development model is best suited for your business, you need to know what the different types are and what they are used for. Here are the main aspects of different offshore software development models for outsourcing.

#1. Fixed Price Outsourcing Model

Fixed Cost Outsourcing is one of the best and most convenient development models for outsourcing. It is the most cost-effective model as the price of the contract is fixed and the software development team has to deliver the project within the predefined sum agreed upon by both the parties. The concept is great for small to medium sized companies. The model is very popular for scaling the business up, especially for the ones with a low budget. This is because start ups and other small and medium sized companies often lack big funds, and with this model they can get their work done within a fixed budget.

The process is a little tricky for the software development team though. If they come up with new ideas, add or change something in their approach while they have already started working on the project, they will have to compensate for the extra cost from their estimated profit. So, the decision makers have to avoid implementing any big changes that could affect their own pockets.

#2. Time and Material Model

Just like the name suggests, this outsourcing model depends on the billing method. The cost of development depends on how long the developing team actually works on the project. It is basically freelance contracting on a B2B level. Remote software engineers are hired to work with developers to complete particular short-term tasks. This model is opted for when the total horizon of the work is a bit difficult to estimate. It is quite flexible and the amount of work and people can be increased or decreased according to the requirements of the project. It proves the most helpful to small or medium sized companies with a clearly defined and time limited scope of tasks. It is also beneficial to companies who are unsure about what the project would require in the future.

However, the time and material model requires complete involvement of both the parties. The developers need to make sure that their working hours are getting billed and the client needs to make sure they are only paying for the time that they actually worked for. Another problem with this model might occur when a number of changes are suggested from time to time because of its flexibility. This may lead to a delay in the completion of the project.

#3. Dedicated Resources Hiring Model

This model has a different approach. It eliminates a number of problems that someone would face with the other two models. In this offshore software development model, an offshore development company provides an exclusive team for software development. This team is hired for the completion of one particular project and is supposed to report to the team on site and connect with them as and when required.

The role of the team, however, is not limited to delivering the project on time. They are also responsible for managing the system and keeping the progress of the work in check. There is a fixed cost that is supposed to be paid to the team per month.

This model works best for long term projects with fixed goals but fast and frequently changing approaches. It adds more workforce and brings cross border expertise to the company. But a separate team also brings with it a larger possibility of disagreement and conflict and an increased cost.

Choosing the right model for offshore software development may be difficult because of the different advantages that the models offer. It needs thorough analysis of what the particular project needs. The client’s team must discuss the different aspects of the project in order to avoid any type of conflict in the future.