Which engagement model is ideal for offshore software development?
Three most common yet crucial engagement offshore development center models to set up an offshore development center are:
- Fixed Cost Model / Retainer
- Dedicated Team Model
- Hourly/ Time & Material Model
(a) Fixed Cost Model / Retainer
The fixed Cost Model is one of the most simple and beneficial engagement models for offshore delivery center also known as ODC, ideal for small to medium-sized projects. In this engagement model, the cost is finalized, eliminating all the possibilities of any additional service cost or hidden costs.
The fixed cost model is most relevant for start-ups and SMBs as they often have a limited budget. Plus, it provides the security of getting the project delivered on time (as everything is written initially on the contract).
b) Dedicated Team Model
It is a team-based model that consists of all the sources of technologies, architecture, and platforms. A dedicated team model is assigned to one project at a given time, which is great for developing some big volume or complex project.
It is for a long development process that lasts for a long time and requires a dedicated remote development team to complete a project.
c) Time & Material model
Time & Material model is used when the total work scope is uncertain and cannot be estimated. Well, these kinds of projects cannot be assigned with a fixed price and dedicated team as the total scope is undetermined.
The volume of the work fluctuates as software development is in process. So, hiring developers on an hourly basis makes more sense. By choosing the time & material model, the client is charged for the actual amount of time and effort spent by the software engineers.
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