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Different models of Outsourcing

December 29, 2006 by Mainak Biswas under Offshore outsourcing303 views
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I was thinking earlier today that I have been talking about outsourcing but I have not covered what are the different models of outsourcing that are available to a business when its finally ready to grow. Lets talk about that today.

Basically, when you are thinking about outsourcing, you have two fundamental models i.e. Onsite Outsourcing and Offshore Outsourcing.

Onsite Outsourcing
In this model the design, development and testing teams are allocated on the clients location directly for a particular period of time. This model is particularly useful when:

1. You need access to very specialized skill
2. The nature of the project is very confidential
3. Support is needed on a constant basis
4. Requirements are not defined clearly or they change dynamically

Savings: Low

Offshore Outsourcing
In this model the entire SDLC is executed at suppliers premises which can be located in geographically different location (typically in lower cost countries). In this model the communication is carried out by digital channels such as Phone, Email, Messengers, Video Conferences etc i.e. physical meeting is occasional if at all present. This model is used when:

1. You want to “Follow the Sun
2. Lower the costs significantly
3. Have adequately defined requirements

Savings: High

Apart from the above fundamental models of outsourcing, there are several hybrid models. They have been discussed below:

Model 1: Offsite Outsourcing
In this model the supplier is located not inside your location but
somewhere near it. This model allows physical interaction with the
supplier when required. This model is ideally suited when:

1. The project is of shorter duration
2. Your office does not have the excess capacity to accommodate the suppliers team
3. The requirements of the project does not change very frequently.

Savings: Low

Model 2: Hybrid Model of Outsourcing
This model offers you the best of both worlds by separating various steps in SDLC into different locations. This model is typically offered by suppliers who have onsite office as well as an offshore development centre. The client is supported locally by a coordinator who in turns interacts with an offshore project manager.

In this model activities like requirement analysis, high level design, acceptance testing and deployment is done onsite where are development, detailed design and testing is done offshore.

Savings: Moderate

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