When you outsource software development work within your business…
There are different reasons you do it, which we have covered in detail before. Usually, it’s a mix of quality, flexibility, time-saving, and cost-efficiency.
When you outsource, there are typically two models of the type of provider you end up working with.
There are more models than this, but the basic two models are:
In this situation, you have a set of processes and tasks that need to be completed. You give these processes and tasks to the outsourcing partner and they do them in the way you requested. Then, you pay them for following orders. You see this model more in call centers than anywhere else.
In this model, the company and its outsourcing provider work together, more as strategic partners. The company explains its goal, its processes, its software specs, its revenue projections, its markets, etc. The outsourcing partner talks about previous projects they’ve done, how to approach industries, software trends, new ways of approaching sprints and backlogs and scrums, etc. The company hiring the outsourcing company and the outsourcing company itself become partners. It is an even relationship.
The advantages of each model
Usually a company will get order-takers as an outsourcing partner if they have tight deadlines. They already know how exactly they want something done, or how the tasks should be performed. They don't want new ideas. They just want their process followed, but they don’t have the ability to hire full-time, and their time is consumed with other projects. So they just want an external team to do the work in the way the work is supposed to be done. No strategy, no new ideas, no new ways of thinking about tech or software development. Just do this work in this way. And oftentimes, this works for companies with outsourcing partners. It’s not going to get you better processes or better ways of working, but if you simply need to make deadlines, you go for this.
You still are able to hit the deadlines. The work and tasks are done. You also get:
- New ways to approach product development
- New processes
- New sprint formats
- New backlog resolution approaches
- New revenue ideas
- Growth plans that have worked in similar industries
- New technology
- New code bases
It’s a two-way street instead of a one-way street. Cost-wise, this is an investment, not a one-time cost to meet tight deadlines.
What you want here ideally is a team extension model, which makes the co-creation and co-strategizing much more efficient. You still get elite software developers but they are working right alongside your team to make the projects and the revenue happen.
How do you know which software development outsourcing model you might need right now?
Glad you asked. We put together a checklist of factors and ideas on this exact topic to help guide you. You can download it below as you think about what you need in terms of upcoming projects and new revenue streams for a post-COVID world.