How to Choose the Right Software Development Engagement Model?

However, it requires clear well-defined requirements and project scope and effective In today’s rapidly evolving technological landscape, software development plays a crucial role in the businesses success. As any kind of complex process, software development contains various approaches aimed to fulfill the same need – deliver necessary products with less time and money expenses, and with higher efficiency and quality. The solution to this task lies in the sphere of project requirements evaluation. A lot of things have to be considered: from the project size (including budget, development team size, estimated implementation time) to the technical requirements (platforms, integration, functionality, etc.). Outsourcing software development teams may cover key needs and significantly reduce costs while accelerating the development time but only if a customer selects the most rational approach for him and his initiative.

While choosing an outsourcing software development company it is important to remember that successful product implementation begins with the choice of suitable type of contract and project development model. The right decision helps to avoid the vast majority of issues that may appear during the development process.

Whether you are a startup, a small business, or a large enterprise, choosing the right software development engagement model is essential for achieving your goals.

This article will guide you through the process of selecting the most appropriate engagement model for your software development project.

What Is the Software Development Engagement Model?

The software development engagement model refers to the approach that outlines the relationship between a client and a software vendor during the development project.

It defines the terms, conditions, roles and responsibilities between the client and the development team.

The engagement model serves as a foundation for collaboration, setting clear expectations and guidelines for both parties involved.

It helps establish an understanding of the project scope, delivery timeline, pricing structure, and resource allocation. The chosen engagement model also determines how the project will be executed, managed, and monitored throughout its lifecycle.

Different software development engagement models offer varying levels of client involvement, control, and resource allocation. The selection of the engagement model depends on the project’s complexity, budget, timeline, and the client’s specific needs and preferences.

By choosing an appropriate engagement model, clients can effectively manage their software development projects, optimize costs, and ensure smooth communication and collaboration between the client and the development team.

Types of Software Development Engagement Models

When choosing a software development engagement model, it’s important to consider your project’s unique requirements, budget constraints, and long-term goals. Here are three common types of engagement with a software provider:

Outsourcing Entire Project Development

IT outsourcing is a popular engagement model where a client partners with an external software development company to handle the entire project.

The client usually has minimal involvement in the day-to-day operations of the project, focusing on core business activities instead.

It offers cost-effectiveness, access to a wider talent pool, and fast scalability.

project management to ensure successful collaboration.

Benefits:

• Cost-effective as it doesn’t require having an in-house development team.
• Access to a larger talent pool and expertise from the outsourcing company.
• Scalability and flexibility in resource allocation.
• Allows the client to focus on more important activities.

Pricing Models for IT Outsourcing:

There are basically two pricing models when outsourcing your project entity to the software provider – fixed bid, time & material – each has its pros and cons and can effectively work for some particular projects. Detailed comparison is presented below as well as some tips on which one to choose.

Fixed Bid

This type of contract is ideal for small-size or urgent projects. Fixed bid perfectly works when the project specifications are clearly defined and unlikely to change. Such an engagement model implies that a client has a clear understanding of how the final result should look and the work is clearly stated in the SRS (Software Requirements Specification).

• Efficient for projects with clear, stable, and settled requirements
• The final cost to develop a solution is fixed unless there are no additional changes
• Minimal client involvement and communication

Time and Materials

The main idea of the Time & Material approach is in its name, it is more flexible and transparent for a client. In a T&M engagement, the customer usually gets an estimate on the number of hours needed for project implementation and an hourly rate to calculate the total software development cost. Any additional work can be easily evaluated based on the preliminary discussed hourly rate.

• Ideal for projects that don’t have clear requirements or expected to change
• Flexible price and estimated development time
• Suitable for large and long-term projects

IT Outstaffing aka Staff Augmentation

IT outstaffing, also known as staff augmentation, involves hiring remote software developers or a whole team to work exclusively on your project.

In this engagement model, the client retains control over the project’s scope, timeline, and overall management, while the outstaffing company provides the necessary resources.

IT outstaffing is beneficial for businesses that have a specific project but lack the required in-house expertise or resources.

It allows for more flexibility, direct communication with the developers, and greater control over the project’s direction.

However, effective coordination and communication between the client and the remote team are vital to ensure successful project execution.

Pros:

• More control and involvement in the development process.
• Flexibility in selecting and managing the remote developers.
• Direct communication and collaboration with the team.
• Cost-effective compared to maintaining a full in-house team.

Usually the time and materials pricing approach is applied where the customer only pays for the time vendor’s specialists actually spend on the project tasks. However very often such an approach is transformed into a dedicated team engagement in the long run.

Dedicated Team

The dedicated team engagement model involves setting up a long-term collaboration with a software development company.

The client forms a dedicated team comprising Project Managers, BA, developers, UI/UX designers, QA engineers, DevOps, and other necessary specialists who work exclusively on the client’s projects.

The dedicated team model offers the advantage of having a committed team that aligns closely with the client’s goals and requirements.

It provides flexibility, scalability, and continuous support throughout the software development lifecycle.

However, this model requires ongoing collaboration, effective communication, and regular coordination with the dedicated team to achieve the desired outcomes.

Pros:

• Dedicated resources exclusively focused on the client’s project.
• Higher level of control and involvement in the development process.
• Long-term collaboration fosters understanding and alignment with the client’s goals.
• Flexibility to scale the team and adapt to changing project requirements.

Why Is It Important to Choose the Right Engagement Model?

One of the important steps in the realization of a successful and efficient product is to choose suitable engagement models. Wrong decisions may cause additional costs, loss of time and even nerves. The majority of problems can be avoided long before the first line of code is written, if the right engagement model and contractor is chosen at the initial stage.

Thus choosing the right software development engagement model is crucial for several reasons:

1. Cost Optimization: Different engagement models for software have varying pricing structures. By selecting the right model, you can optimize costs and ensure that your budget aligns with your project requirements.
2. Resource Allocation: The engagement model determines how resources are distributed for your project. Understanding your resource needs and selecting the appropriate model can help you access the right talent and expertise.
3. Project Control and Management: The chosen engagement model defines the level of control and management you have over the project. Assessing your project’s complexity and your team’s capabilities will help you determine the level of involvement and control required.
4. Scalability: Consider your project’s scalability requirements when choosing an engagement model. Some models for software development offer greater scalability options, allowing you to swifter adjust to project needs.
5. Communication and Collaboration: By selecting an appropriate engagement model, you can ensure that communication channels and coordination processes are well-defined and suitable for your project.

Download a full version of Software Development Models Comparison.

Conclusion

Selecting the right engagement model is an important choice that can greatly impact your project’s outcomes. Consider your project requirements, budget constraints, and your preferred level of control and flexibility when making this decision.

By neatly assessing these factors, you can choose an engagement model that aligns with your project goals and increases your chances of success.

Whether you would like to outsource your IT project entirely, or augment your in-house team with some external resources on an outstaffing basis, or hire a dedicated team,  the SCAND team can provide you with all of these approaches. Do not hesitate to contact us.