Engagement models in software development
The success of your project begins with selecting the suitable engagement model that fits your needs, and the choice depends on many factors, such as the complexity of the project, its duration, your business goals, strategy, budget, and more. Based on your considerations, you can pick various engagement models for software development or a combination of models that will benefit your business.
The engagement model, simply put, is a kind of plan or strategy describing the provisions of the partnership between the customer and the supplier. It specifies exactly how the vendors’ developers will participate in the project, what responsibilities they will assume, how much the client will pay for their services, who and how they will manage the development team and other aspects of the development process. To put it bluntly, no one-size-fits-all engagement model works for all types of projects, so you have to choose the one that works for your particular project. So we’ll look at the different models here so you can decide what’s right for you.
Dedicated team model
A dedicated team is a model of cooperation with a digital service vendor in which the client is provided with software experts for an extended period. An example of a company that operates according to a dedicated business unit model is Brights. The client can manage the team from their side or have the service provider’s project manager coordinate the communication process. When you hire dedicated teams, you get a team of professionals explicitly handpicked to achieve your business goals. This team is similar to an in-house team, which is technically your employee.
Advantages
Cost Efficiency
Customers significantly save on infrastructure because by hiring a team, they get paid by the hour for remote work on the project. This eliminates worries like office rental, equipment purchase, electricity bills, etc. Moreover, it is much cheaper to hire a well-organized team rather than search for developers with the necessary skills.
The software development process is controlled and managed
The customer participates in hiring IT specialists and oversees the development process at all stages, receiving regular reports on the tasks performed. If they wish, they can outsource all project work to an outsourcing company that has provided a dedicated team.
Partial delegation
Minimal management effort is required on the part of the customer since administration and micromanagement are essentially the supplier’s responsibility. The customer participates in important decisions that directly affect results and quality.
Disadvantages
The recruitment process takes time
In a dedicated team model, recruitment is usually done from scratch, meaning it will take some time to profile, recruit, interview, and onboard. This is not the best option if you urgently need additional resources.
Unsuitable for small and short-term projects
The dedicated team model is not suitable for small projects with a short duration. Moreover, most IT outsourcing providers do not provide teams for less than 6 months. In this case, you may want to opt for a project-based approach.
Fixed price
The Fixed price model assumes that the budget for the entire project is approved before the start of work and remains unchanged. The contractor bears the risk of missing deadlines. This model may seem convenient for you as a customer because you know exactly how much the project will cost and when you get it.
Advantages
Easy to make the estimate as accurate as possible
The purpose of estimating is to predict the amount of time and money that should be spent on the project requirements. Unlike others, all needs are strictly defined in a fixed-price contract. This feature allows you to estimate as precisely as possible and meet the expected time and budget.
No financial risk of exceeding the budget
A fixed price contract is named so because the price agreed in the contract is unchangeable. So, you will know exactly how much your project costs, and you will be sure that no additional fees will be charged.
Project development and control over developers take less time
After agreeing on all the requirements and signing the contract, all you have to do is passively wait for the web development team to do all the work for you. The fixed price model, unlike others, does not require client participation and control at every stage of the process. You can focus on your company issues or just take a vacation and go to the coast while your project will be under professional management.
Disadvantages
It is not always possible to determine all the requirements in advance
You have a certain idea of the result and have described your needs and requirements. However, empirical experience is better than theory. Good ideas for improvement may arise during the practical part of the web development process. It will be difficult to make amendments. A change request and re-evaluation are required. The fixed price is not designed for changes after the contract is signed.
Fixed price is not suitable for all web projects
The fixed-price model will be a good choice if your project is simple and small. However, it will not be able to meet the needs of large-scale projects that require building complex functionality and long implementation periods.
Outstaff
The concept of outsourcing implies the transfer of a certain part of responsibilities and tasks to an outside contractor. Thus, the client company receives those services that it cannot perform independently. In turn, the contracting company ensures the high-quality performance of the tasks assigned to it by its team of specialists.
Advantages
Saving resources
Since outstaffing usually involves working remotely, you remove the need to equip a room for developers. You also do not need to spend resources on finding, recruiting, adapting, and training staff.
Getting your work up and running quickly
Whenever you need to launch your business, you can immediately outsource urgent IT tasks to an outsourcing company with a ready team of specialists who will get to work directly.
Possibility of attracting a more significant number of highly qualified specialists
The choice of an outsourcing IT company is not limited by location, which means that there is access to a more significant number of specialists with unique skills.
Reducing the burden of managing employees
When outsourcing the selection of a team for a project, the distribution of responsibilities, control, and payment for the work of its team of specialists, the contractor carries out its own.
Disadvantages
Problems with communication
In remote cooperation conditions, establishing continuous communication is more challenging. Especially when there is a time difference between the customer and the contractor, without proper communication channels and a well-established method of cooperation, the effectiveness of project work can decrease many times over.
Time & Material
Time & Materials – a contract in which the developer’s rate per hour is fixed. The customer pays for the time spent on his task and the materials used during the work.
Advantages
Flexibility and quick reaction to market changes
You can decide in the process in which direction to develop your project. You can rework some project parts and add new features depending on market conditions. And if an unforeseen problem arises, then moving the terms and adjusting the schedule will not be a problem.
Quick start of the project
To start the work, you do not need to spend time in the preparatory stage and careful planning to create tasks. It is enough to determine the team and the minimum viable functions of the project.
Quality of result and hypothesis testing
Thanks to continuous iterations, you can quickly receive and process feedback from your customers on the product. As a result, create a marketable and usable project.
Disadvantages
Uncertainty
On the one hand, development is a non-linear process in which things often do not go according to plan. On the other hand, when there are no clear boundaries for the completion of the project, technical perfection begins to drag on. So there is a situation when “A samurai has no goal, only path.”
Сombinational models
In addition to these standard engagement models for software development, several hybrid engagement models represent the best way to meet the unique needs of a development project. Below are two examples of hybrid models:
A combination of Fixed price and Time & Material models
– Ideal for projects with an initial stage of uncertainty
– The requirements gathering phase is conducted hourly to determine project requirements.
– Adequate documentation and well-defined project timelines are in place
– Cost-effective and time-saving
Combination of Fixed price and dedicated team model
– Perfect for undocumented product development projects and for testing a pilot project for commercial viability
– Entry-level requirements and individual modules are based on a dedicated resource model to prepare the basic framework for the solution
– Subsequent development steps are based on a fixed price model
– Assists in planning the launch of the product/solution
Conclusion
Since the IT industry is very diverse, you can implement any idea, find a company budget, and with any level of competence. As we mentioned earlier, there is no one-size-fits-all solution to engagement. Each structure has advantages and disadvantages, so it is essential to know about each model before making a final decision. In addition, you should understand components such as the scope of the project, the business premise, and the conditions of both organizations before proceeding with the development process. Finally, you should consult with the IT company to understand the services included in each model and then only make a decision.
