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How To Choose The Right Engagement Model While Outsourcing

How To Choose The Right Engagement Model While Outsourcing

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Here are some key challenges faced by businesses looking to outsource their projects to third party software development companies:

Engagement Model

  1. Choosing the right engagement model
  2. Smooth flow of communication between client and development teams
  3. Timely and quality project delivery
  4. Project development according to business requirements
  5. Many projects go out of budget

Outsourcing Challenges

Outsourcing Challenges

Source: http://takesupplychain.com/

Here is how choosing the right engagement model can be helpful for your business:

  1. The key to better outsourcing is to build a partnership with the outsourcing vendor and achieve the best results for the business.
  2. This leads to a collaborative work environment helping in improved efficiency of business processes.
  3. One should ensure that the expectations with respect to the project are absolutely clear, and there is no room for any sort of confusion.
  4. Outsourcing can help you take your product to the next level with the help of expert and innovative solutions from the outsourcing partner.
  5. Planning out the project and ensuring all the activities are pre-decided helps in timely completion of milestones.  
  6. Being futuristic about your project helps in getting much better results.
  7. The most appropriate engagement model must be selected, to ensure better relationship maintenance between the client and the outsourcing partner.
  8. The scope within which the relationship between the client and the outsourcing partner exists is called engagement model.
  9. There should be  proper service level agreement, so the development work can be done as required

Some of the most popular engagement models.

Retainer Model

In a retainer model, the billing is done on a periodic basis, generally 2-4 weeks. In this model a fixed fee is defined for each period.

  1. The fee is based on the scope of the project and the resource requirements. Once these are decided, the outsourcing partner gives an estimated retainer fee for the project.
  2. The milestones are predecided as well. If the client is comfortable with the fee, the project is kicked off according to the stipulated conditions.
  3. This sort of an engagement model is more suited for large and long term projects.

Hourly Model

In this model billing is done to the client according to the hours spent by the team on the project. This is a cost effective engagement model for small and short term projects.  

  1. In this case, an hourly rate is predefined on the project. Once approved by the client the ETA for the project is provided to the client.
  2. Billing is done on successful completions of the milestones, as decided.

Fixed Cost Model

In case of projects where the client is absolutely clear about the scope and requirements of the project, then this model is used.

  1. The outsourcing partner in this case provides a fixed cost estimated depending on the nature of the project.
  2. The stipulated completion time is also defined. This model is suitable for medium to large projects with definitive requirements.

At ValueCoders there is an option to outsource your projects according to the desired engagement.

The Agile teams at ValueCoders are equipped with the latest tools and techniques for all kinds of business projects. ValueCoders provides the following additional benefits

  1. 2 Week free trial
  2. Guaranteed SLAs
  3. Satisfactory project delivery 

You can discuss with our experts and they will guide you to choose the best one.


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