4 1/2 Engagement Models of Outsourcing

Looking to getting started with outsourcing? Here is an attempt at demystifying the (4 ½ ) engagement models you will run into:

▣ Staff augmentation - you get the bodies you need. Interview candidates and select them. Once they join, you pay in $ per month. If resources leave, the partner offers replacements.

▣ Staff augmentation with deliverable ownership (aka out-tasking) - your partner takes ownership of milestones and assigns an experienced delivery manager to ensure schedule + quality. You pay for this additional resource, but buy peace of mind. Rates are $ per month.

▣ Project based outsourcing - your partner owns the whole project and delivers it on time and schedule. You work with a delivery/program manager to track progress. The partner may make a fixed or a not to exceed cost bid if the deliverable is well scoped out, else it will be T&M in $ per month.

▣ Complete outsourced product development - this is similar to #2 above, but here your partner starts with the requirements, builds a spec, designs, develops, tests and possibly deploys the product. Needs specialized talent with expertise and experience. Typically, larger services organizations will make fixed cost bids for such opportunities.

▣ BOT (Build, Operate and Transfer) - your partner builds your entire team, operates it (typically for 3 years), and transfers it to your own entity at the end of the contract, taking care of recruiting, benefits, look and feel, IT and infrastructure, security, attrition, day to day business management, legal, taxation, regulatory and compliance requirements. Help to form your own entity can also be provided. Do note that you must treat all hires as your own employees and not contractors and must take ownership of performance, pay raises, bonuses and perks. A transparent cost + model works best here and you pay in $ per month.

Questions? Reach out to me here and I will be happy to help.

Some suggested reading:
https://lnkd.in/egSjVyFt
https://lnkd.in/eY-Nms7q
https://lnkd.in/eGgzNxkC

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