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Organizational models in outsourcing software development services: Project-based vs. team-based

organizational model

Nowadays, several companies outsource their software development tasks. These projects attract numerous developers, either local or from other parts of the world. Actually, the complexity of these processes is increasing. In such conditions, the success of the software development projects is determined by how well the client software development firm handles all of these teams. Outsourcing software development is a wise decision. But selecting the correct outsourcing organizational model is the most relevant factor for success.

In this article, we will learn more about the top software development outsourcing models and how to make the best decision for your firm. Therefore, if you are wondering how to outsource a software development model, carefully read this post. We will discuss the following topics:

  1. Why outsource software development?
  2. What are the impacts of outsourcing on your company?
  3. What kinds of software development outsourcing models are there?
  4. Software development outsourcing approaches based on relations
  5. Team-based organizational model
  6. Organizational model based on projects
  7. How can you select the best outsourcing organizational model?
  8. Why is software outsourcing the ideal option for you nowadays?

1. Why outsource software development?

organizational model

Outsourcing is not a new practice in the business world. It began decades ago, being applied in minor tasks such as cleaning or post services. These jobs were considered a needless expense that could be reduced by paying less money to expert external firms.

Now, outsourcing is more complex. In effect, at present, it covers parts of the core of many businesses. That is the case in the IT industry.

Indeed, more and more organizations are resorting to software development outsourcing these days. Of course, these firms know that using one or more forms of outsourcing aids them:

  • First, making more efficient use of their assets. Full-time workers are, in essence, the most costly and least flexible form of labor.
  • Then, detecting top people with crucial knowledge. Talent is the single most relevant factor for CIOs in reaching their goals.
  • Furthermore, performing and innovating more quickly. Over the last decade, the number of firms shifting to outsourced suppliers has enlarged by more than 40%. Outsourcing is being applied to many fields such as web development, network security, CRM systems, and even robotic automation.
  • As a result, savvy firms use outsourcing strategically and contract labor to bridge knowledge gaps, meet variable demands, and handle specific projects.

In addition, note that it is easy to find a qualified software development agency (either personal or corporate) in almost any place on the globe.

2. What are the impacts of outsourcing on your company?

As earlier stated, outsourcing software development is a growing business trend. Additionally, firms may address current skill deficits and hasten large projects. Additionally:

  • Firstly, outsourcing software projects helps firms develop while also saving money.
  • Then, outside development teams can work on client-facing initiatives, freeing up internal assets to focus on new, creative projects. Companies may miss out on attractive prospects if they do not have the needed people.
  • Further, hiring new developers and training existing teams take time. Often, outsourcing software development models is a more fitting option. Too much work is a pleasant problem, but there is still an issue. Bringing in outside teams relieves stress and allows for constant progress.

If you have already decided to pursue IT outsourcing, you may be learning many organizational models and shaping the ideal one for your firm. Thus, we will go directly through the most common models and when to use them.

3. What kinds of software development outsourcing models are there?

Software outsourcing is a competitive tool in itself. So, long-term firm success depends on choosing the proper software development agency and the right sort of partnership. Making the correct decision can help gain a great advantage.

Then, what sorts of software development outsourcing models are there to choose? The answer is that there are too many.

In general, outsourcing organizational models can be described by how they are related in three areas: location, relationships, and contracts. Let us see:

  • Locations: On-site/nearshore/offshore/best-mix-shore.
  • Relations: Staff Augmentation/Managed Team/Project-Based.
  • Contracts: Time and Materials vs. Fixed Price.

In this paper, we go to delve into the two major categories of relationship-based software outsourcing: the team-based and the project-based models. We will leave the third big branch, staff augmentation, for another time.

Below, we go through the advantages and disadvantages of these options.

4. Software development outsourcing approaches based on relations

As said above, the correct choice of the software development agency is vital. Relationship-based outsourcing models outline the client and outsourcer’s ownership and duties.

Relationship-based software outsourcing is a correct option because:

  • Relationships drive firm success. Whether or not your actions are effective is related to your links with your supplier.
  • Everything comes down to the relationship. Compromises are based on relationships, regardless of location. Location-based actions specify only under a concrete relationship.
  • Location is not everything. Your bond with your supplier is likely to surpass the distance between you.
  • Different clients and projects require different types of outsourcing. Not all projects and service providers are the same.

Thus, the three principal relationship-based outsourcing organizational models are as follows:

  • Models of Staff Augmentation

Staff augmentation models, in which the client bears the bulk of the duties. In this plan, you lease workers from an outsourcing firm to help with internal development projects. You continue to own your work from beginning to end.

  • Models of Managed Teams

Managed team models, in which the client and outsourcing provider share the functions and ownership of development projects. The client and outsourcing provider agree on which duties belong to whom.

  • Models Based on Projects

Project-based models allow the outsourcing provider to take on most of the tasks. Your outsourcing supplier, taking ownership of the projects from start to finish, end the development based on your terms.

5. Team-based organizational model

organizational model

The dedicated team organizational model provides your firm with access to an expert development group. Subsequently, in this plan, you and the outsourcing partner share ownership of the project direction.

Therefore, you and the team agree on the vision, roles, timelines, outcomes, and scope. Proper communication is crucial for steering the project in the right way.

Thus, a committed crew enters your project. In the field, the outsourced project manager is the boss of that crew, and they work outside of your firm.

5.1 The advantages of a team-based paradigm

In-depth knowledge of business

 A team working for a given firm for a longer time will get a better grasp of its operations. Equally, working on several projects will greatly expand their skills.

Improved use of skillset

Workers in a team-based paradigm have the option to apply their abilities to different projects. Additionally, they also get to share and explore their skills with others. In the project-based paradigm, such an advantage is not possible.


This model creates a flexible and agile team. Therefore, while waiting for client input on one project, this team may swiftly pivot to another. As a result, this move allows them to work on many projects at the same time.

5.2 Disadvantages of a team-based paradigm

Communication barriers

Communication works best when there is only one two-way channel. However, in a team-based model, various teams join forces on the same project from varied places, each with its own time zone. This array might result in a bad interaction.

Difficulty providing suitable time and attention

When working on many projects, workers need to spend proper time on each project. Indeed, this outcome is only possible if a flawless judgment was made early.

The closing outcome may become trapped

If communication between teams working on several projects breaks down, the completion of all projects may become stalled. So, this event will cause needless delays in the project’s progression.

5.3 When is it appropriate to form dedicated teams?

In the team-based model, one remote or dispersed team can concurrently work on two or more software development projects.

A superior outsourcing instance must be a devoted team. However, an experienced in-house project manager is necessary for any event.

Thus, when you want knowledge in a particular field, enlisting the assistance of a professional team is also beneficial. It can provide the technical expertise required to develop an efficient solution.

Also, you may maintain control of project direction and decision-making with a committed staff. This solution enables you to verify that it follows your vision.

6. Organizational model based on projects

Project-based outsourcing is another common approach. Your partner controls the whole project agreeing to your demands under this scenario.

One software development services project is for one team. This team may now include individuals who possess the talents for the project.

Your partner will manage the process and deliver the finished result to you. You will also agree on a timetable to follow.

6.1 The advantages of a project-based paradigm

Steady communication

A single project manager in the team improves communication between the client and the team. Crystal clear and exact communication also helps to improve the team’s efficiency and productivity for the job at hand. It also aids in the removal of any barrier.

Cross-functional groups

The team comprises individuals with a diverse range of abilities. These skills are necessary for the effective development of software.

Diverse mental processes

Because the team includes individuals with diverse skill sets, communication among these experts can result in innovations, new options, and the finding of best practices.

Focused work

Distractions end by intent on one project at a time. Owners may focus their entire brains and energies on completing the software development project.

6.2 Disadvantages of a project-based paradigm

Limited vision

Because the team focuses on a specific project, it might not see the larger picture. It is likely unaware of how its actions may affect the overall outcome.

Management abilities

If the team’s project manager does not have the best skill set, the team may focus on less critical tasks. This loss might lead to the project failing.

Team member change

Switching a member of the working team will be hard. Although replacing people based on their skill set is less complex than based on their knowledge and commitment to the project.

6.3 When should you use project-based outsourcing?

Project-based outsourcing is best suited to basic, simple tasks with little scope for change. The projects finish with the outsourced team without your control or input.

Also, this approach is ideal for businesses that know in detail what they want to develop. Thus, you can focus on other aspects once you have briefed the outsourcing team.

The project-based strategy is suitable for non-core initiatives. Outsourcing your core development needs additional control and care.

Project-based outsourcing contracts are perfect for ventures with minimal software development skills. It is simple and efficient to outsource jobs to skilled teams.

7. How can you select the best outsourcing organizational model?

There are good reasons to outsource a software development model. It is flexible, efficient, and cheap. Knowing the various outsourcing organizational models might assist you in making the proper selection.

There are advantages and downsides to team-based and project-based outsourcing. Several variables can influence which organizational model is best for you. These factors include the size of your in-house team, the level of flexibility desired, and the scope of your project.

7.1 What are the most effective outsourcing models for your company?

As earlier said, there are some crucial things to consider while choosing the best outsourcing strategy:

  • The degree of adaptability required.
  • The amount of time your project manager can devote to the project.
  • Your in-house team’s talents and skills.

Different issues have different solutions. Begin by being aware of the point that needs a solution. These many outsourcing organizational models all provide varying degrees of freedom. You should select the one that best meets the needs of your project.

By the way, another critical factor is time. You must set aside time to manage your outsourcing plan. The project-based methodology requires the least time, whereas staff augmentation demands the greatest.

8. Why is software outsourcing the ideal option for you nowadays?

In this post, we have shown in-depth some outsourcing organizational models, and their advantages and disadvantages. Surely you have noticed that IT businesses are ever more opting for outsourcing as a strategic tool.

Clearly, outsourcing software development is a complex option. Therefore, we suggest contacting our prime firm in Dubai, Connect Tech, to receive our professional support as an expert IT outsourcing and cybersecurity agency and thus make the best decision at all times.

On Connect Tech, we offer you a wide range of IT solutions and software development services. Supplying from cloud solutions to marketing services. We are to address any type of project under the modality that suits you best. Contact us at +971 43 316 688 or email us at We will be pleased to assist you. is a website expert in job vacancies search for those looking for new prospects. By simply sending your CV, you will be able to search for a job adapted to your features and aspirations. You can also send an email to to receive more information. Contact us!

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