Every business has its own needs, making it essential for offshore development service providers to create custom plans. In this section, we will ponder upon various models to hire a team of developers for your upcoming projects according to your requirements.
So let’s explore and understand all the available engagement models to hire dedicated developers.
Fixed-Price Engagement Model
Fixed price engagement models are widely used, and most companies use this to hire offshore development teams for their definitive activities. As the name suggests, these types of engagement models are contracts that are entered with a fixed price for the completion of a particular project/product.
If you have a predefined and carefully crafted software development requirement, a fixed-price engagement model can do wonders for you. Here. you are free from all liabilities as you hire dedicated developers using this engagement model as a business. Although the demanding times have called for more flexible models nowadays, Fixed price engagement still holds the number one rank when a business needs to explore new areas and technologies under a tight budget.
Whether requirements increase or decrease, the company has to complete it within the stipulated budget & time, freeing you from all the related worries. Before looking to hire offshore development team using this engagement model, have a look at its pros and cons first.
Pros of Fixed-Price Engagement Model
Fixed price engagement models are significantly less risky compared to other models. Importantly, this greatly benefits you if you are unsure at the end of the project and want to add better features to make it usable. No matter in which direction your requirements go, you don’t have to pay extra above your fixed price for the functions that you have mentioned.
This is another significant benefit of this engagement model. In this model, all the project objectives are predefined to keep the communication clear between the two parties for transparency. All offshore development companies comply with this benefit for they know exactly the amount of work that needs to be done for better results.
So before picking up the project, the offshore service provider references these objectives and creates a proposal for you to accept. Also, these predefined goals make development work more straightforward and help create a better estimate of project costs.
With fixed costs come fixed deadlines. Here, the project scope is set before the finalization and beginning of the work. So the companies providing developers with rent services can create a detailed plan with clear deadlines to work on your project. If there are no major changes in the program during the process, the projects under this engagement plan will indeed sign off in time.
Cons of Fixed-price Engagement Model
Companies offering fixed-price engagement models charge high amounts for their services. Because they want to keep a buffer of acceptable changes that you might make to the original development plan. Moreover, as a business, the service provider is eager to complete the project before deadlines. And sometimes ends up with just a functional product & not an exceptional one while the customer ends up paying more for undervalue product.
Moreover, there are very few fixed-price engagement projects that go over their deadlines. And if they get completed before the deadline, as the price is predetermined, the customer is bound to pay more, and the service provider earns more profit.
Fixed-price engagement projects are less flexible. Here you cannot hire offshore development teams to work on ever-changing requirements. If you do so, the service provider might charge more or terminate the contract.
This model is only good when you have fixed requirements that are planned out well. In other scenarios, the model can be worthless as there is very less space for flexibility to the changing requirements.
Unlike other engagement models, you have negligible control over the project developers when you hire a dedicated developer in fixed-price engagement models. Most developers working in this model don’t prefer absolute control over their progress and giving out regular status updates and progress reports. And may just hand over the project on completion and explain everything to you at the end.
Moreover, you cannot actively manage and control the developers in this engagement model. So, if you are looking for complete control of the resources you hire, this might not be the right choice.
Time & Materials Model(T&M Model)
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The time and materials model is quite a different engagement model. It is helpful when the project scope is unclear and you don’t want to commit to any upfront budget. Thus, the time and materials model helps companies to hire dedicated development teams and pay only for the work done. In this model, you don’t fix any charges upfront, and there are negligible advance payments.
As the project advances and the developers work on your project, you pay for the hours the developers work dedicatedly on your project and the materials utilized during that time. In it, Offshore development service providers fix an hourly rate for the type of developers for hire you select. To be precise, you pay for the number of hours their work is done multiplied by the hourly rate of the kind of developer employed and the number of developers employed. Further, let’s look at the pros and cons of this engagement model.
Pros of Time & Materials Model
If your project requirements are ever-changing, you should hire dedicated developers under this engagement model. It provides more flexibility, and you can keep adding new features without any constraints.
Time & Materials model provides you with the highest level of control for your projects. Moreover, you can supervise your developers and closely manage them on all tasks and progress on the project. Also, you can ask them to work in your time zone and host regular status updates for the smooth progress of the projects.
Time & material model allows you to hire dedicated developers at the least prices. Under this model, you pay only for the actual work and the resources utilized not for any other free time that the developer passes under the name of your project. As a result, it decreases your payments and results in immense cost savings for your projects.
Cons of Time & Materials Model
If you don’t have time enough to look at the project activities constantly, this might not be an ideal engagement model for you. As the developers tend to leave the timers on and do other tasks while you pay for the project activity. So, if you cannot keep an eye on your developers all the time, you should not hire offshore development team under this model.
Time & material model projects have a significant drawback as there are no transparent budgets for these projects. As there are different developer hiring rates in different areas, and everyone takes different times to complete tasks, you cannot create a reasonable budget for the completion of your project.
- No Clear Completion Dates
Time & material engagement model provides the highest level of flexibility, but this comes at the cost of unclear completion dates. As you can keep changing the features of your project until you are satisfied, while you just have to pay more money. Changing requirements takes additional time, and this delays project completion in most cases.
Offshore Development Centre(ODC)
This is a type of developer engagement model where you can create offshore offices for your projects. Here you can hire dedicated developers that can work on your projects from separate offices in other countries.
Many companies operate on this model and rent out their entire offices along with the developers to work on client projects. Though there are many options, there are few businesses that prefer to go for this engagement model. To understand what makes it so special, let’s have a look at its pros and cons.
Pros of Offshore Development Center
Offshore development centers provide a great reduction in costs. In this model, you hire an entire office at a cheaper destination, and you utilize it for all your project work. As a result, it decreases your infrastructure costs when you hire offshore development team under such an engagement model, along with a sharp decline in your operating costs.
Offshore development centers are closed with limited access areas where only authorized people can work. Due to this, there is no trespassing, and no one can tamper with your data. Moreover, you can put checking and other security measures on entry and exit from the ODC to maintain your data security.
Companies primarily benefit as they hire dedicated developers under such models to get better project results. As ODCs have limited access and focused work areas where developers can work on your projects uninterrupted. Due to this, they have more productive time while creating business products, enhancing the overall project’s outcomes.
Cons of Offshore Development Center
ODC engagement models only work well when the time zone differences are less or the offshore team accommodates the on-site time zone. As ODCs are often situated in far cheaper countries with different time zones, there can be a lot of issues in communication as the teams have to work at other times and cannot meet personally too.
Just like the time & materials engagement model, when you hire dedicated resources under this model, you need to monitor them closely. So you may have to face some quality issues if you don’t have the time to manage and control your offshore team.
Though the long-term cost benefits are great, the upfront costs can be a deal-breaker. So when you go to hire dedicated development team under this model, be prepared to pay significant amounts upfront. As the offshore companies require these amounts to set up workspaces for your team.
If you are looking to hire dedicated development team that works right by your on-site team, then staff augmentation is the engagement model you should opt for. In this model, you can hire all kinds of employees to extend your on-site team. Whether you want to hire consultants, developers, or testers, you can quickly get them from any rent a coder service provider.
Pros of Staff Augmentation
Staff augmentation provides complete control over the hired resources. So, it turns out to be the perfect engagement model if you like to exercise control over your developers for hire.
Staff augmentation is suitable for short-term projects and requirements. If you are looking to fill a spot in your company for some time, it is better to rent a coder through staff augmentation rather than full-time employees.
Staff augmentation provides the highest amount of choices. In this engagement model, you can find all kinds of people. Whether you want a hire dedicated programmers, or QA analysts, you can find them easily from offshore development service providers.
Cons of Staff Augmentation
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- Increased Long-term Costs
Staff augmentation services are good only for the short term. If you hire dedicated programmers under this model for a long time purpose, then the costs will shoot up. And they will be as much as on-site staff. So this model is not suitable for long-term staffing needs.
If staff augmentation services are availed during mid-project or process, it becomes hard to get them on the same page. As they are available virtually, some things take time, and team bonding is also delayed. Moreover, they need to better understand the project from the start, which requires more KT sessions.
Staff augmentation has a significant drawback, and this is about the staff feeling unmotivated. They are constantly connected with on-site teams and the development processes, and there is a burnout that makes them unmotivated. If you hire dedicated programmers under this engagement model, be ready to arrange some parties and refreshments or stimulations now and then to keep the offshore development team motivated and productive.
Next, the critical concern is where to look for efficient dedicated developers who will not bail out on the project at the critical moment. And also, delivers the best of the final product as desired. Rest assured, we have covered that point too in our next section.