Outsourcing, Outsharing, And Dedicated Team: a New Definition of Professionality
Skype that connected millions of people around the world was developed by a group of Estonian programmers. Slack Technologies Inc. that is worth over $5 billions set itself on the path to success enlisting the help of outside experts. Popular browser Opera is supported by the developers from more than 25 places across the world.
These companies’ formula for success is placing their bets on the remote staff.
Why not follow their lead?
There are 3 dissenting camps: supporters of outsourcing, followers of outsharing and adherents of the dedicated team.
Umbrella IT company found out what business model is actually most effective.
1. Let’s start with Outsourcing
Outsourcing is the practice of an organization to contract a part of its internal operations out to outside experts.
Outsource is a high-potential type of business optimization yet it still causes controversy. So before you rush to introduce outsourcing into your business, let’s compare its business benefits and potential risks from the point of view of their productivity
- Time and cost saving: the price you pay for an outsourced service is usually much lower than a corporate employer’s rate. Plus, as you don’t have to employ additional full-time staff, you don’t pay any fringe benefits or spend your time on their training and adaptation;
- Focus on core activity: outsourcing of non-core operations helps to focus on the core business activity and increase company’s productivity;
- Wide range of professionals: when you’re looking for an expert (especially a narrow one) you are locally bounded. Outsourcing provides you an access to a much larger talent pool where you can choose the most qualified professional with an appropriate range of skills.
- Potential breach of confidential data: working with a third party means that there is a risk of sensitive business data disclosure. And even if your even if your vendors are trustworthy, there is always an option that their cybersecurity isn’t simply as good as yours;
- Lack of centralization: an off-site team is harder to be managed than an in-house staff. Ineffective management and lack of monitoring may lead to lack of transparency and unsatisfying results;
- Cultural and language barriers: cultural differences and language barriers can cause ineffective communication and lead to lower productivity;
- Variable quality: there are many options in outsourcing to choose from. You can select the candidates that would be the most appropriate for your job at a bargain price. Yet unfortunately, it’s still a fifty-fifty chance to be right – you don’t trade quality for the price.
Since the major reason for outsourcing is cost reduction, a pattern emerges that quality is not an outsourcing’s priority. Presented disadvantages and some other smaller issues that you can’t fully control make you think that it’s not worth the trouble at all.
But in the era of economic globalization, we simply can’t be restrained by physical boundaries. So it’s unreasonable to reject such business model completely.
2. We must improve it – and that’s the time to introduce the next level solution: outsharing
Outsharing is basically an outsourcing’s best case scenario.
In outsharing a side-team is not just a group of anonymous developers but an equal remote partner who is considered to be a full-fledged CTO: they are in the loop on the product roadmap and able to pro-actively propose tech solutions that suit your requirements best.
- Value orientation: in outsharing experts have professional incentives to get the job done efficiently and at high quality standards;
- Employee involvement: involvement and motivation of the remote experts are the key strategic difference between outsharing and outsourcing, that determines the result;
- Understanding of the client’s idea and business logic: remote professionals see the whole picture: they know how the final product must look like, understand the technical debt and make decisions in accordance with the client’s business logic.
- Project management problems: in some instances, there is a lack of effective management and coordination in the group of developers (if there is no PM in a project) that may compromise a digital product.
Outsharing as a business model looks demonstrably more promising than outsourcing, given the fact that the costs are rising proportionally to the level of quality. Nevertheless, some businessmen are not happy with it, maintaining that there is still a lack of control of the development processes.
3. So it’s about time to address the dedicated team
The Dedicated team is a business model where an outsourced customized team of IT professionals involved in the creation of a specific client’s project.
Umbrella IT Studio is a perfect example of the dedicated team business model.
In many ways, the dedicated team takes the outsharing ideology to the next level. In the context of the business model, a team of highly skilled experts is formed specifically for your project. This team implements the highly productive engineering solutions that are relevant just for your tasks.
One of the crucial points for a successful project realization is a smooth client-vendor communication.
Control of the project realization and all the aspects of development is exercised directly by the client or by the assigned experienced PM, who was approved by the client himself. The dedicated team provides workflow transparency at all levels.
- Cost reduction: dedicated team cut expenses without sacrificing the quality;
- Quality: having a partner intended to deliver a high-quality product is a guarantee of the desired result;
- Stability: dedicated teammates focus only on your specific project and a line-up remains the same throughout all the phases of a project’s development;
- Full transparency: in Umbrella IT we provide work transparency with help of daily work reports and detailed project documentation, regular updates via Trello and constant client-vendor communication.
- Inefficiency for short-term projects: if your task is estimated to take only a month and is not very time-consuming then probably hiring a dedicated team would be simply uneconomical.
Pros and cons matching of different business models make it clear what business model is the most effective.
However, the choice of a specific business model depends on your motives and priorities only. You should make your balance between cost and quality clear and on the basis of this very balance you need to choose a partner that can meet your requirements perfectly.
- Outsourcing is a least-cost solution for the companies which want to improve the efficiency of the workflow by making their in-house employees concentrate on their core activity rather than routine and secondary tasks.
- Outsharing is an optimum alternative for the solution of tasks that require a value-oriented approach, stable control of the development processes at a reasonable cost.
- Dedicated team is the best business model for large and complex projects that provides a direct control of all the production and the lack of risks.
What will you choose?