Offshore Software Outsourcing

Software Outsourcing in Toronto

Offshore software development models are evolving every day. There are always questions on which level of outsourcing or business model will best suit an organization’s business objectives. Here we review main aspects of the offshore software development models for the outsourcing.

toronto software outsource models


So, the software development outsourcing models can be categorized into the following groups:

By Levels

This means how the customer wants or can control the amount of work performed by the contractor. It can be divided in the following categories:

  • Low-level Outsourcing
  • High-level Outsourcing
  • Complete Technical Outsourcing

In low-level offshore software development model, the product management is left within the customer company. But development and QA processes are shared to outsourcing.

In the High-level outsourcing  the project management, solution, and test design are passed to the offshore development center.

In the Complete Technical Outsourcing model, all product requirements document is developed in house and all the technical aspects are outsourced which include Product Requirement Document (PRD) review, solution design, development and solution implementation.

By Business Models

As from the economic perspective, the outsourcing engagement into the development allows to significantly reduce costs for one or the other project. The reason is that company will not need to maintain additional structure and enlarge in-house development department. The commonly accepted IT offshore outsourcing business models or billing models are listed below:small-buisness-hiring-process-toronto-small

  • Fixed Cost Model
  • Dedicated Team/Resource Model
  • Hourly Time & Material model

This Fixed Cost Model is widely used practice and one of the safest offshore development outsourcing model. The fixed cost offshore outsourcing is very beneficial engagement model for the small and medium scale enterprises. Considering the fact that start-ups and small businesses are often limited financially, this model helps them to feel safe and be sure that they will not run out of the budget before they have a final product in their hands.

The Dedicated Team or Resource offshore software development model is team-based and usually consists of coders, graphic designers, testers and architects.

Hourly or “time & material” billing is narrowly aimed offshore software development model. It is used mostly when the total scope of work cannot be estimated. Nature of this kind of the project is vague and dedicated developer cannot be assigned.

By Service Models

The choice of the service model depends on the volume of the project, but also has its influence. The service model chosen will indicate the part of work shared between in-house and offshore teams.

  • Staff Augmentation
  • Offshore Development Center
  • Project-based

Staff augmentation enables companies to empower the in-house staff with offshore developers as they are fully fledged part of the team.

Offshore Development Center is a model which is feasible in a long-term projects with a big scope of work. This model is used by all the companies who need to decrease the cost without sacrificing the quality and without lowering the available development resources.

An offshore software development model used for the projects with defined time frames often used for projects with well-defined requirements that are most likely won’t change during the development process.

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