Aside from IT outsourcing (offshore or nearshore) types depending on the location of the outsourcing firm, in addition, there are a couple of outsourcing models that can explain the relationships between the customer and the IT outsourcing company.
Project outsourcing is a strategy which enables companies to partner with vendors that have exclusive experience that’s lacking in-house.
Job outsourcing works best if the sort of projects you’re outsourcing does not represent the core function of your organization. Additionally, it is an excellent solution if your job’s requirements are not likely to change throughout the development procedure.
Workforce augmentation (staff augmentation) is a strategy for filling skill gaps that enables companies to hire top-level specialists for short- or long-term jobs while also being able to avoid the costs of hiring new fulltime employees.
Personell added through the staff augmentation model are used by the IT outsourcing company, which means that you don’t need to be worried about infrastructure and other expenses associated with having full-time employees, nor do you need to spend time on recruiting. However, the new staff members behave like your employees, which means that you’re the one supervising, leading, and managing them.
Dedicated development center (DDC) is an IT outsourcing model where a company locates its committed resources in another country so as to get access to bigger talent pools and benefit from reduced labor costs and/or taxes, while keeping full control over the work procedure.
It’s possible to start a dedicated development center by yourself, but this has obvious disadvantages. For one, you will need to do the recruitment at a mostly unfamiliar locale and learn the intricacies of local labor laws and taxes. The alternative lies in partnering with a business that offers recruiting services, office centers, and keeps your programmers on their payroll for a specific fee.
Because of all the risks involved, opening a dedicated development center by yourself is only worthwhile if you’re going to employ at least 40 new folks at the outsourcing location. Otherwise, partnering with an outstaffing seller (nearshore or offshore) makes far more sense. Another less risky alternative lies in partnering with a seller who assembles the work force, then buying the team out and opening your own office.
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