First-time outsourcers may have heard terms like fixed cost project and time and material engagement. These are some of the outsourcing models that mobile app development teams follow today. There are a couple more, and which model you choose decides how the project would be done in terms of releases and payments. Here are some of the most popular outsourcing models used in the mobile app development industry.
#Fixed Cost Project
Fixed-cost projects require teams and their clients to have total clarity on what features would be built and how they would be built. It always helps if the team has created a similar product before or the work to be outsourced is identical to another module of an existing project. All this leaves little room for misunderstanding product scope and scope creep that often happens in the outsourcing market. This is the most standard of outsourcing models.
A considerable amount of time needs to be spent documenting the features and laying out the timelines and deliverables. The contract would state the deliverables and their corresponding timelines, and the exact project cost. This is signed before the first invoice for advance and project kickoff.
This model is a bad idea when the product is constantly evolving, bringing changes to the scope. Care has to be taken to ensure that change orders are carried out properly if new features need to be added. Minimizing project risk and cost escalation are the primary goals of this model.
#Time & Material
As the name suggests, this model involves paying a team periodically. The project and its scope are not fixed, and as a result, continuous discovery takes place. Initial product discovery is made where two things become clear:
- The magnitude of the project (approximate time & resources required)
- Degree of clarity on features (deciding between fixed vs. time and material)
The time and material model is carried out in various degrees. Some vendors state an approximate number of months required to finish the tasks. This usually happens in short 3-6 month engagements. Projects have also been known to involve teams for two years or more where teams bill clients in monthly cycles and clients are also happy with the resources. They work closely with the client’s in-house team (even onsite) for continuous product development. T&M works best when the project scope is not fully clear and keeps evolving. It also gives quality higher precedence as compared to time and cost. Unlike other outsourcing models, the duration of the project is not set at the beginning.
This model involves on-boarding one or more resources to an existing team. Best suited for clients with in-house teams that need extra hands, vendor teams also subcontract work to other teams in this fashion. Once the required skill set is identified, interviews are conducted to select appropriate resources. Billing is done every month, and the resources need to be micromanaged by the client. There are no deliverables or timelines.
In this model, the resource works for a standard 8-10 hours a day/5-6 days a week and carries out the assigned tasks. The difference from other outsourcing models is that the clients manage the resources; the development team needs not to worry about it (primarily onsite engagements).
#Build, Operate & Transfer
This is the most convenient model suitable for businesses planning to underlay their own offshore or nearshore development center to meet their emerging requirements. Under this model, agencies build and operate the project for a defined period and then transfer it back to the client, along with necessary staff if required.
#Hiring Dedicated Developers
This model involves hiring dedicated web and mobile app developers to get your specific project or job done as per your requirements and within your timeline and budget. This method proves highly beneficial when you want to augment your in-house team or ramp up your development resources. Since you hire dedicated developers according to your specific project’s requirements, this model helps you save on your overall app development cost.
The app development company’s sales staff is always under a lot of pressure since their performance directly affects its revenue. It’s easy to lose sight of the foremost responsibility here – understand a customer’s needs clearly and pitch the best approach based on technical and other senior staff’s inputs. It could either be a suitable outsourcing model, use of the right APIs, or even decide to turn down the opportunity due to risks. Each customer has a different need, and selecting the outsourcing model takes precedence. It affects the way the project would be done and the quality of the product built.