Nearshore outsourcing can give you the best of both onshoring and offshoring. You benefit from lower developer costs and a wide talent pool while minimizing time zone differences.
You can even reduce language and culture barriers if you pick a country that speaks the same language as you.
However, nearshoring still suffers from the same risk issues as offshoring. You’re technically working with a team in another country, which can still make legal actions challenging.
Why pick one model when you can do them all? Multisource outsourcing is where you hire several teams to handle sections of your app project.
For instance, a London-based fintech app project can hire a financial consultant from the same city (onshoring), a UX design team from France (nearshoring), and a development team from India (offshoring).
Outsourcing to multiple vendors gives you the utmost flexibility. You can get more expensive specialists to work on critical project areas while outsourcing the bulk of the work to lower-cost generalists.
When done right, multisourcing allows you to optimize your app costs while finding the best teams for the job.
The drawback, however, is that it’s harder to communicate and manage multiple teams.
This is especially true if one team’s work depends on another team’s output, which means small delays can ripple out and slow down your entire project.
Multisourcing can be a great option for complex app projects with many moving parts, particularly if it uses microservices architecture.
Relationship-Based Software Development Outsourcing Models
Relationship-based models are determined by the dynamics between the client and service provider.
Do they work as part of the in-house team or as an independent contractor?
What does the workflow look like?
Here are some examples of relationship-based outsourcing models.
Staff augmentation model
The staff augmentation model, also known as the extended team model or outstaffing, is where you hire a third-party provider to bolster your existing in-house team.
Augmented staff can either be onsite or remote.
In essence, it’s like hiring an employee to your team, except that the added staff is still a third-party service provider in this case.
You don’t need to worry about normal employee costs like onboarding, training, or benefits.
Asking an agency to provide a freelance UX designer because you don’t have one on your payroll is an example of staff augmentation.
Because of this, the time and materials model is fairer on both sides.
Developers get the right compensation for their work, and the client receives a quality product proportional to the money they spent. It also creates less stress and friction, enabling everyone to focus on the output.
That’s why we consider the time and materials model as the best approach for most app projects.
Shifting scopes and changing requirements are the norms; thus, you need a flexible payment scheme to match.
A seasoned software engineering executive, Marin’s role combines his in-depth understanding of software engineering processes (particularly mobile) with product and business strategies. Humbly boasting 20+ years of international experience at the forefront of telecoms, Marin knows how to create and deliver state of the art software products to businesses of all sizes. Plus, his skills as a lifelong basketball player mean he can lead a team to victory.
When he’s not hopping from meeting to meeting, you’ll find Marin listening to indie rock, or scouring the latest IT news.