Why is the service delivery company more advantageous than the rest of the outsourcing models?
You need a development team whether you already have a product, are in the idea stage, or are ready to begin developing your product. As the proverb goes, there are two chairs, and either you choose a service delivery IT company or outsource. In the following article, we will discuss the differences between these models, as well as their benefits and drawbacks. This will assist you in making the best decision for you or may provide food for thought when starting your own business.
Let's get started; we'll compare companies based on the following criteria:
- Model distinction
- Human resources and corporate culture
- Financial model
- Project management
The distinction between outsourcing company models
There is a great number of outsourcing companies, as many, like frogs in the swamp, making it difficult to find the one that needs to be kissed, as in that fairytale.
When you enter the platform and begin selecting your own developer, you are using the bulletin board model. It frequently takes a long time for an inexperienced user and finding a vendor who will not disappoint is extremely difficult. The fact that you choose your team independently has both advantages and disadvantages. Toptal and Upwork are among these businesses.
The next model is an outsourcing company with its own developers. These enterprises have their own pool of vendors who can help you complete your task. This model will appeal to almost everyone. The vendor selection will be done for you, and there is no doubt that the task will be completed. The only disadvantage is that in a conflict situation, such companies may defend the interests of their developers rather than the interests of the client. X-team and Intersog are among these businesses.
The service delivery company model is less well-known but no less interesting. It is similar to the previous example. Such companies have their own pool of proven developers, who are also tested before each project. What distinguishes the company from the previous example is that such a model is 100 % customer-oriented, with their interests protected at all costs. UNITEDCODE and Daxx are among these businesses.
Human resources and corporate culture
Companies with their own developers are responsible for their employees' training, motivation, and professionalism. Because this process never ends, it consumes the lion's share of the company's efforts. If you decide to use the services of such a company, their developers will be fully prepared to work.
When it comes to service delivery companies, such companies do not have offices with hundreds of developers and do not focus on keeping their developers in good shape, so to speak. These companies already have verified teams that are fully independent and do not require additional motivation, because if their level of expertise or knowledge is unsatisfactory to complete the task, they will be left behind.
Everything is simple and straightforward if we speak and analyze the bulletin boards. Platform sites screen developers before accepting their resumes, and this is frequently the end of the control. Eventual screening occurs already during the work implementation phase; if the developer does not satisfy you, they will give you the next one - but you will lose valuable time, which is often more important than money.
This is such a broad question that discussing each model separately is pointless. If you can find almost any developer with completely different experience on the bulletin boards, you must perform all stages of verification and selection yourself, which, as previously stated, is not the most comfortable model for an inexperienced person. But when it comes to companies with their own developers and service delivery companies, everything is very unique. Be cautious of companies that claim to have experience and expertise in almost each and every field - this is nearly impossible. Any business has a limit to its level of expertise. It can be healthcare, embedded, digital transformation, e-commerce, IoT, and so on. Check the available cases carefully, and don't be hesitant to ask direct questions.
Which is more financially beneficial, from a cost perspective?
So let's just proceed with the bulletin board. Here you can frequently find a developer ranging from 0 to infinite numbers; prepare to meet the "bloke" that will create a site for $ 4.99. This may appear absurd, but not in outsourcers, such people discredit everyone else. Be prepared to pay a certain amount of commission to the platform even before you begin looking for developers. Of course, they will do their best to find you a developer, but this is not a guarantee.
When it comes to companies that have their own developers, they usually have a set price per person/hour. This can save you time by letting you know right away if the company is a good fit for your budget. Furthermore, some companies allow you to plan how many developers you'll need at a certain stage. That is, it can assist you in staying within your budget. Such businesses are already indicating the developer's price and salary, as well as the company's own services.
Consequently, service delivery companies have tremendous flexibility based on your budget. They can give you a price fork during the negotiation stage, and they can also work within your budget to find developers who fit your financial layer. They can also schedule work and add or remove developers at any point during the work execution process. The important thing to remember here is that you are entering into a contract with the company itself, not with an outsourcer, and the company bears responsibility and financial obligations to the developer, as well as the demand for performing the work. This model is somewhere in between the earlier ones. You can find a development team for a reasonable price, and you'll have a specific partner company that is in charge of everything.
Who is in charge of the project?
First and foremost, I would like to highlight the service delivery company, because these companies resolve this issue better than anyone else, and this is likely their strongest advantage. Companies of this type already include in their services both the functions of a project manager and all of the preceding moments with the search for vendors and the conclusion of contracts with them, as well as subsequent issues with the control and delivery of the product to the client. If your main issue is a lack of time (you don't have time to search, test, control every step, think about payments, and so on), this type of company may well be ideal for you. They respect both your time and your money.
If we are talking about bulletin boards, you or your project manager will naturally be in charge of finding and maintaining a project. You will save money with this course of events, but you will also waste a lot of time, nerves, and personal effort. Yes, platforms frequently provide a service that aids in developer's control, but this is by no means a replacement for a project manager.
Companies with their own teams may encounter a variety of challenges. For example, you may be charged an additional invoice for the services of a project manager, but these services may also be counted as the development team's payment. So proceed with caution and make this point clear ahead of time. Remember that this project manager can be a full-time employee of the company, and he will most likely act in the best interests of his team and the company first.
Remember that when selecting a team for outsourcing, you must consider not only the expertise and skills of the developers but also the time zone in which they are located. On the bulletin boards, you can specify which time zone and country you require a developer from. It's important to remember that you and the developer have at least 4–5 hours of total working time. This particular model will give you complete flexibility in your selection.
At the same time, businesses with their own teams typically have offices in specific countries, with specific working hours that can be difficult to adjust to the general opening hours. However, because of their extensive grids in various countries, they should be able to resolve this issue without any complications. However, this is an issue that must be addressed at the start of any consultation or negotiation.
It just so happens that the service delivery company model, which evolved from the two preceding ones, is notable for its adaptability. Because of their extensive network of vendors in various countries, they can not only work within your budget but also across time zones.
Comparative table of different company models
Each model has its pros and cons. It all depends on your requirements, experience, and abilities. If you have enough time to choose on your own among a great number of outsourcing companies then the bulletin board model will meet your requirements though you will still lack a good manager. The outsource company model works with its own pool of specialists but be ready if something goes not according to the plan, the company will protect their developers but not the client's interests. And the most appealing model is the service delivery company that works with qualified top-notch professionals who are ready to get to the business from day one without any delays. This type of company always makes sure that the client is heard and understood and his requirements are met in accordance with the agreement. You can be confident of a long and fruitful collaboration if you find a good partner in this market.