Offshoring Models

Businesses can leverage models as per their requirements to get the perfect fit for their expected results. 100% Confidential and Secure
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OFFSHORING

Which offshoring model fits you the best?

Fixed Price Model

Fixed price offshoring is preferable for short-term projects with precise and well-documented needs. It entails a clear scope and project specifications, a predetermined delivery schedule, and a set budget. When the client specifies a time frame and a detailed set of requirements for the end product that is unlikely to change throughout the project, the offshore company can provide a schedule and an estimated price based on the project scope and complexity. Development stages are planned during the discussion and the process is followed applying waterfall methodology. Moreover, this engagement model doesn’t require the client’s supervision, but presupposes some scope-related risks for both parties, since any deviations from the original plan will result in additional expenses.

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Advantages

  • Good for small & mid sized projects where requirements & deliverables are well defined from the start
  • Cost and time are well defined before the start of the project
  • Very little supervision is required from the client’s end, as end to end development & deliverables are handled by the service providers
  • Low risk of losing funds as the payment terms are well defined

Drawbacks

  • Long process of planning and documenting each stage or requirements
  • Focus on delivering agreed scope of work, not on a better product
  • High risk of having product that doesn’t fit the market
  • Very hard to make changes during and after the project once it starts
  • Less Flexible in terms of managing additional features & change requests
  • Limited client control since end to end development is handled by the company

Hourly / Time & Material

Time and material model suits clients with long-term projects where the requirements keep changing dynamically and the scope of work is undefined with varying workloads of the development team.This model gives immense flexibility to change or alter the project specifications at any point in time, thus the client has maximum control over the project. Besides, as the requirements evolve, team size and resources allocated to the project can be easily adjusted, simultaneously minimizing time and cost as well as time.

Advantages

  • This model is apt for large and long-term projects where the end product is unpredictable
  • Low risk model for client as well as service providers
  • Generally has flexible budget
  • Client has significant control over the project as well as on any on-demand enhancements during the project
  • Lower risk of potential failure

Drawbacks

  • Flexible or undefined time frame for project completion
  • Estimated budget may vary from the eventual budget because of unanticipated changes that may impact the overall development cost
  • Client has the authority to suggest changes or head the entire development process
  • Undefined deadlines. Any feature enhancements in the project can directly impact the time of the product to market.
  • Undefined budget. The pricing of the project in this model is always tentative because of the uncertainty of time required to design and implement features.
  • Product owners usually have to manage any and every iteration as well as the development process
  • Client loses the developers as well as the product development knowledge

Build-Operate -Transfer (BOT)

This model comprises 3 primary phases – build, operate and transfer. The ‘build’ phase encompasses the entire R&D and recruitment of resources. Everything right from headcount planning, resource screening, recruitment, training, onboarding and infrastructure necessities is taken care of by the service provider. The client however has complete authority of the operations. For you to get the best product in the market, Openxcell provides you with an added authority to set the hierarchy as per your convenience.

The operation phase defines the initiation of the development process which involves – coding, product enhancements and management, maintenance as well as support. At the same time, technical and marketing consultations, payroll management and HR activities are also carried out simultaneously.

Advantages

  • Get ownership of the team
  • Team can be scaled up quickly
  • Client can set hierarchy
  • Can create a product specialised team
  • Establish Team building and motivational programs
  • Get your own branded co-working space - an Offshore Dedicated Centre

Drawbacks

  • Get complete team built in 2 weeks
  • Freedom from screening and recruitment
  • Don’t lose product knowledge
  • Develop your own culture
  • Create customized incentive program
Build-Operate -Transfer (BOT)

BOT vs. Hiring vs. Fixed Price Model

BOT Time & Material Fixed Price
Project Size Large Medium Small
Project Duration Long Avergage/Long Short/Average
Project Pricing Fixed Monthly Fixed Hourly Fix Per Project
Project Timeline Estimated Incremental Defined
Resource Type Dedicated Shared Shared
Team Scalability High Moderate Low
Change Request During Project During Project After Project Completion
Project Control Full Partial Negligible
Project Reporting Daily Daily Weekly/Biweekly
Tech Stack Flexible Situational Pre-planned
Support Until Product Success Until Project Completion Until Project Completion
Accountability Team Client Client
Team Communication Direct Direct Indirect
Project Ownership Full Partial Negligible
Culturally Fit Yes No No
Branding Yes No No
Team Take Over Yes No No

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