Development models – also dubbed “engagement models” – for offshore software development refer to the different mechanics of working with remote software developers or partners.
Since developing software is often complex, laying the proper groundwork from the start becomes even more crucial to lucrative and lasting collaboration.
Development models are like the backbone of partnerships – things go awry quickly if they’re not there. And this becomes even more crucial as the stakes get higher and the software platform becomes more and more complicated and robust.
We have witnessed firsthand how these models work, and we have observed all the different ways software companies ingrain them into their operations. One thing is sure: the better companies get at managing the finer points of individual relationships, the higher performing their software development team will be.
And if you are confused about the various offshore software development models, or how to roll out one, you’re not alone. We know how overwhelming it is to sort through a long list of options for the right fit. To help you choose the best model for your specific needs, we’ve laid out a cheat sheet below–enjoy!
Looking for the perfect offshore development partner? TurnKey is your best bet. We help you hire, you call shots.
An engagement model in offshore software development defines the terms of collaboration between an employer and their software developers (or software development partners if you use outsourcing or offshoring). It lays out both parties’ responsibilities, duties, and payment mode.
You’ll want to select your model carefully as your project’s final outcome is strongly influenced by which model of engagement you choose. Getting this wrong at the outset can lead to a slew of other issues later on in the development cycle.
How you choose to engage with your employees builds your foundation. And we all know, your foundation affects whatever you’re trying to build on it. If you try to create a duplex on a foundation laid for a studio apartment, you’ll struggle with structural issues and design problems. Or maybe what you tried to build will completely collapse. (In other words, don’t let that happen here!)
That said, it’s important to keep in mind that there’s no one-size-fits-all model of employee engagement in software development. Instead, there are various models that can be used to meet different companies’ demands.
The complexity of your project and your preference for partnerships will determine which engagement model is best for you and your company..
Engagement models can be distinguished by the style of work, the terms and conditions under which employees are paid, and the degree to which they are involved. Let’s look at these engagement models and what sets them apart.
The fixed price engagement model is one of the most common in the software development industry. Before development begins, the project cost and timeline are determined and agreed upon.
In this case, both parties (the company and the developer) carefully plan out the entire scope of the project ahead of time using specific project requirements, a budget, and estimated duration of engagement.
This model allows you to clearly estimate the total development cost from the beginning. The developer is expected to follow the terms of the agreement, including the budget.
| 👍 Pros | 👎 Cons |
|---|---|
| Certainty and clarity—you have an idea of the requirements and timeline at the start. | Can be more expensive because you’re fixing costs without leaving room for flexibility once engagement progresses. |
| Doesn't require close monitoring because the development team already knows what to do. | Establishing the project’s requirements and scope can take a long time, delaying the actual start of the work. |
| There is clarity on the deliverable, and everyone knows what to expect. | There is little flexibility and no room for modifications. |
| Being on the same page from day one fosters efficient collaboration and trust with development partners. |
The T&M model is more flexible than the fixed price model. The developer’s charge is based on expertise and time (most likely on an hourly rate basis).
This model is ideal for continuing development projects where the project scope and requirements are unclear. That is, you know what you want or intend to achieve, but there are no defining pathways or a fixed end date guiding the project.
If you know you need work but are unsure how long it will take or what the work will entail, rather than making a wild guess and ending up locked into an engagement that doesn’t end up fitting the project, you can use the T&M model.
Because it’s negotiable and uses a time-based payment system for the amount of work, tasks, resources, materials, or other expenses incurred during the development process, it allows you the flexibility you need.
With the T&M approach, the client has more say and participates more actively in the project development
| 👍 Pros | 👎 Cons |
|---|---|
| Highly flexible—allows for project/budget modification. | Requires more of the client’s attention along the lifetime of the engagement. |
| Supports the Agile development methodology. | With no end date, there are no assurances that the project will be delivered on schedule. |
| Allows the client more influence and control. | Disparity between the project's actual costs and the expected estimate. |
| The project can begin almost immediately. | No framework can be built before the project begins. |
| Enables continuous development and continuous improvement. | No milestones to mark progress along the way, harder to manage expectations. |
| More cost-efficient. |
The Outsourcing approach is usually adopted when a company needs to augment its in-house development team. A great short-term solution, outsourcing helps companies flex their teams for a specific period and particular project; the company can end the engagement once the project is complete.
This is also great when you need a developer with a niche talent that you don’t already have on staff. Maybe you need a QA tester or a senior java developer to work on a specific project. Rather than employ the person permanently, you can simply hire one to contribute during the duration of the project.
You are responsible for paying their rate or salary, any associated costs, and a fee to the agency who finds you the talent you need. This model is also called the “Open Book Model” because of its unparalleled cost transparency.
| 👍 Pros | 👎 Cons |
|---|---|
| Transparent costs. | Time zone issues if your outsourced talent is far away from where you work. |
| Faster development start. | There is always a strict termination term. Clients must give 2-3 months' notice before terminating the agency’s services. |
| Cost-efficient. | Requires more of the client’s attention. |
| Allows you to manage the talent. |
Offshoring is used by companies who need to create a long-term arm of their business, either for a certain project, a niche product, or just to handle growth without exhausting their core, in-house team. When you hire offshore talent, you have the opportunity to add additional team members for a period of time or to engage specific tech expertise you may be missing at home.
This article offers a brilliant explanation of offshoring and all of its many benefits.
You find and partner with an offshoring agency who conducts staff recruitment and onboarding for you. These new workers join your in-house staff, but they are still (technically) workers for the agency. And they work for a longer period of time, so you get to know them, and they get to know your company, product, customers, and people.
Offshoring with an agency saves you time on recruiting and saves you having to learn about different country’s nuances, language, and skill niches. It also reduces your development costs because generally speaking, the countries you’re hiring from have lower costs of living and salaries are commensurate.
| 👍 Pros | 👎 Cons |
|---|---|
| Reduced development cost: Offshoring offers high quality at lesser rates. | You don’t always know if your talent is only working on your project or if you are their top priority. |
| Niche and speciality expertise can be found overseas. | Differences in time zone and language barriers can impede workflow. |
| Better collaboration and efficient work relationships can be built over time. | Culture shock—work styles, communication, sense of urgency, and prioritization can all be misunderstood or lower than expectations. |
| Clients have greater control and significant involvement. | You can’t be sure if the talent you get is the exact talent you need—maybe you just got who was available. |
Does offshoring sound like the solution you need? Worried about culture fit and time zone differences (not to mention how to search the globe to find what you need)? We’ve got the solutions for all these pain points.
See that “Cons” list above? Ouch. Want to know how to erase it? Call TurnKey—we’ve been in your shoes and had the same problems. So we created a solution. It’s offshoring, but better, because it’s customized for you and eliminates all the pain points with traditional offshoring.
We call it YOURshoring.
We’ve prioritized, optimized, and strategized so you don’t have to. The inefficiencies are gone when you Yourshore with TurnKey. We:
At Turnkey, we assemble an offshoring team that is built around your needs. We don’t just provide you with whoever is available. We ensure that you lock in a long-term solution that advances your company goals, scales your product, and vibes with your team and vision—all under budget and on schedule.
All set to ditch the cons list and go all pro? Yourshoring is the answer. And TurnKey is the way to make it happen. Let’s build a winning dev team together.
Beyond the four popular models we have discussed, there are other important engagement models you may find interesting:
The service level agreement outlines the basis of collaboration between a client and the service provider. It establishes the expectations and deliverables according to milestones. Every milestone in this model must be clearly defined with delivery dates.
The two fundamental components of your project service agreement should be management and services. The service segment should outline the services that are offered and those that are not, as well as the roles and responsibilities of each party.
The hybrid model is a blend of the onshore and offshore engagement methods. It is suitable for clients who require both in-house support and remote services.
This model can be helpful for non-technical leaders who are building technical companies, products, and teams (provided you trust who you hire 100%). It gives the vendor complete control over work processes including onboarding the needed talents, providing necessary tools, building infrastructure, ensuring timely delivery, and managing the scope of the project.
The high-touch and low-touch onboarding are two distinct collaboration methods that specify the vendor’s role in implementing the SaaS offerings.
We know. It’s a lot. If you’re still unsure which method is best for your company (and when), we can help.
The first thing you should know is that there is no one best engagement model. There are only suitable models specific to your business type and demand. So how do you know which is suitable for you? Let’s roll!
Already have a roadmap? Skip straight to Yourshoring, kid.
Engagement models set the tone for any business relationship. They establish roles, responsibilities and are crucial to the successful outcome of a project. Getting this right should be your top priority because it forms the basis for the entire working relationship. And if you’re unsure of the most suitable model, outline your objective, budget, and idea. It will help you make an appropriate choice.
Did we blow your mind? It can be confusing… but the ideal solution is pretty clear to us. If you need a short-term solution, we’ll help direct you. And if you need us, we’re here!
While there are several engagement models in the software development industry, the four more popular models include: Fixed-Price model, Time and Material model, Outsourcing, and Offshoring/Yourshoring (TurnKey’s optimized solution).
An engagement model in software development defines the terms of collaboration between an employer and the software development partner. It establishes the responsibilities, duties, mode of payment, and level of control for both parties.
It depends. Outsourcing can be great if you need a specialty talent for a short period of time. Or if your in-house team is slammed and you have another project that has to get done.
Offshoring is great if you are good with saving money, hiring niche expertise, and having people work for you around the clock (who isn’t?!). And of course, Yourshoring is the best long-term solution (it’s offshoring but the way YOU want it).
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