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Choosing the Right Engagement Model for Offshore Development

Offshore development has become highly popular due to the sheer amount of benefits it offers to reduce and control expenses, accelerate company transformation and reduce the time to market and most importantly improve your business focus. However, all these benefits are only possible if you select the right provider and the right engagement model.

When it comes to engagement models, there are majorly three different models available:

  • Fixed cost Model

  • Time and Material Model

  • Dedicated hiring model

Every model has its own pros and cons and you should analyze your requirements before you select one.

Fixed price model: In this model; the scope, requirements, and timeline are defined first and a pre-agreed fixed price is paid for the final product. So, if you have a short term project and are clear with the goals and workflow, this is your best bet. This model, however, provides less flexibility.

Time and material model: In this model, the development is gradual and continuous. If you are willing to invest in gradual progress in the development process, this model is perfect for you. This is a pay per use engagement model and the billing may be hourly, weekly or biweekly, depending on the vendor’s requirements. It’s perfect if you want a flexible and agile project execution. The project requirements need not be as well defined as the fixed price model. The price, however, varies based on the time and effort used.

Dedicated hiring model: In this model, resources are hired for the purpose of development and project management happens in-house. A fixed monthly fee for hiring resources is charged. You have full control over the resources you hire and serve as a good model for long term or ongoing projects.

So, depending on your project and type of engagement you wish with the offshore team, you can select the right model by analyzing the kind of flexibility, control, and type of resources you want. Which type of engagement model do you wish to explore?

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