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How To Choose The Right Business Engagement Model While Outsourcing

Business face many  key challenges while looking to outsource their projects to third party software development companies. The first one is choosing the right business engagement model, second comes budget allocation. Some of the other challenges are

 1) Lack of communication between client and development teams

 2) Not able to deliver Timely and quality projects.

 3) Project development according to business requirements

4) Many projects end up unfinished for fake initial commitments

Here is a graphical representation of the outsourcing challenges that businesses face frequently:

In this blog post we will focus resolving challenges related to business engagement model. Here is what you should do before opt for a  business engagement model:

 1) Planning out the project and ensuring all the activities are pre-decided helps in timely completion of milestones.  Hence, before choosing the right model, your plan should be ready on the table.

 2) You should ensure that the expectations with respect to the project are absolutely clear, and there is no room for any sort of confusion. This will help you to cut short the list of parameters.

 3) The key to better outsourcing is to build a strong relationship with the outsourcing vendor. This leads to a collaborative work environment helping in improved efficiency of business processes. Hence, before choosing the model, check your vendor’s transparency.

 4) Being futuristic about your project helps in getting much better results. Therefore you should forecast the upcoming challenges and be ready for them.

5) You should check for a   proper Service Level Agreement (SLA),  so the development work can be done as required

The scope within which the relationship between the client and the outsourcing partner exists is called a business engagement model. Some of the most popular business 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.

 i. 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.

  ii. The milestones are pre-decided as well. If the client is comfortable with the fee, the project is kicked off according to the stipulated conditions.

 iii. 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.  

 i. 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.

 ii. 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.

 i. The outsourcing partner in this case provides a fixed cost estimated depending on the nature of the project.

 ii. 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 Weeks 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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