Each project is unique, so you need a tailored approach to choose the interaction type that meets development requirements. In this article, we explain what an engagement model is and how to choose the best interaction variant to successfully implement an IT project.
What is an Engagement Model?
To build a strong partnership between the client and the supplier, you should choose the right project engagement model. Before choosing the right option, review the project details, including its size, strategy, and scope.
A software development engagement model is a specific concept that defines the relationship between the customer and the supplier throughout the work.
Engagement models help you build the entire work process properly. You discuss payment methods, terms and deadlines, management issues, and much more needed to implement a quality project.
Many wonder whether a single model will suit everyone. The answer is obvious: no single interaction model fits everyone. As mentioned earlier, each project is unique, so you need to approach it accordingly.
Types of Engagement Models
Several basic IT engagement models exist. They differ in their conditions, pricing, and operating model. Therefore, we will now consider the most common ones and review their features and characteristics.
Relationship-Based Business Engagement Models
Software engagement models differ mainly in the level of developer involvement in a future project. Now we will look at the 3 most popular relationship-based interaction models and their main characteristics.
Outstaffing Model
This is a very interesting business engagement model that can be described as an exchange of time for money. In short, people work for you, but officially they have a different employer: an outstaffer. Payment is usually hourly.
Companies use this model when they need to expand their team. As a rule, the outstaffing company provides all necessary equipment, jobs, and other resources. This saves you money on the costs above. The main advantage is that you, as the client, have full control over all company activities.
In many cases, outstaffing is done remotely, as teams may be based in other countries. So choose a provider close to you. Don’t forget the time difference; it should be optimal and convenient for collaboration. This simplifies the workflow and interactions.
Pros
- Versatility. You can quickly customize the drafting process. You manage all personnel-related stages, so you can quickly set team size and adjust staffing to match your business.
- High level of knowledge. Extensive experience, unique skills, and knowledge in your industry – all this you can get from specialists who will cooperate with you.
- Process adjustment. When you hire outstaffing specialists. You are in complete control of the entire process. At any time, you can correct the workflow.
Cons
- Difficulties with communication. Often, this model involves joint activities with companies in other countries. Therefore, you may face language barriers and other cultural differences in the developers’ country. It is best to discuss the language and cultural views with the future team in advance.
- Time Zones. Another point you may encounter is time zones. Time differences can make things difficult, but with the right measures, you can avoid them. Discuss the work schedule with the future team and agree on a time that works for both of you.
- The outcome is up to you. For the draft to be high quality, the customer must clearly understand what they want in the end. To do this, you need to draft a clear specification and oversee the entire process. This responsibility lies with you.
When to choose?
As mentioned earlier, you need this type of team when you need to scale up quickly or gain specialized expertise in a particular area.
Dedicated Team Model
A dedicated team is one of the most popular IT engagement models. With this collaboration, you will have a team at your disposal to handle the full development. This is very convenient for adjusting to the project budget. The customer manages the process; the contractor handles all other responsibilities.
Pros
- Budget savings. You reduce development costs because, with this cooperation, you don’t lose project quality but spend less by hiring a dedicated team. You save on equipment, space, and other necessary things.
- Process control for the project manager. Another advantage is that the agencies themselves provide a project manager who oversees the entire process and is responsible for quality.
- Expertise. If you need help only in a specific area, you may select the appropriate service provider, thereby gaining unique knowledge and skills in the area you need.
Cons
- Possible inaccuracies. The fact is that, as mentioned earlier, agency runners are responsible for control; therefore, in order to get the desired result, you must provide a detailed description of all tasks and processes, as well as explain in detail what you want to receive;
- Ignorance of the language and cultural characteristics. As with the outstaffing model, you may encounter language barriers and different cultural perspectives. It is quite hard to manage people from other locations.
- Declassification of information. Every business has its secrets, strategies, and other hidden information. To create a unique solution for you, the supplier must know as much as possible about you. So you will need to share as much as possible about yourself, sometimes including confidential information.
When to choose?
A dedicated team suits long-term projects. This model is especially useful for a company that does not have many highly qualified employees in the required development area.
Technical Partner
A technical partner is a key role in IT engagement models. In short, you hire a company with extensive experience, including specialists from various fields, such as designers, project managers, testers, and more.
Pros
- Effective solutions. With a large, balanced team and deep experience, they can ensure the best development for your business’s specific needs.
- Qualified specialists. You will have access to skilled specialists in design, testing, marketing, and other areas.
- Saving time. The contractor is fully responsible for all development processes, so you can focus on more important business processes.
Cons
- Not suitable for short-term projects as it is not profitable.
When to choose?
This type of interaction suits large, long-term projects that require many specialists. If your project fits this model, feel free to choose it.
Types of Contract Business Engagement Models
Less popular engagement models in software development include fixed-price and time-and-materials cooperation. Further in this article, we will explore their features and characteristics in more detail and help you choose the one that suits you best. For more, explore our dedicated development team.
Fixed Price Model
When choosing a software engagement model, many prefer the fixed-price model. A key feature of this approach is setting a specific budget and discussing all the details, including timing, scope of work, equipment, and more. Based on these details, you set a fixed price.
Pros
- Proper budget allocation. You know the project cost in advance, so you know what to expect and how to manage the budget.
- A clear development implementation process. You discuss all stages and necessary work in advance, so the performer is less likely to make mistakes or omissions.
- Saving time. As in some other models, the performers handle the whole process, so you can allocate your time more rationally and focus on other important things.
Cons
- Lack of flexibility. If, in the end, more work is needed or something needs to change because it doesn’t fit, it will be hard to do this because the price and conditions have already been discussed.
- Complicated assessment. For the performers to evaluate the entire work correctly, they need time. Therefore, because the assessment is complex, it takes considerable time to determine the final amount, which makes the process a little longer.
- Regular communication. To get the quality development you want, you should communicate with customers regularly. This can be tiring and time-consuming.
When to choose?
Many people prefer the Fixed Price Model over other engagement models in software development because it works well for small projects with a small budget and limited scope.
Time & Material Model
Another engagement model that deserves attention. The bottom line is that you pay for the work done. You pay for the work the developers complete.
Pros
- Simple to modify. You might easily make any edits and corrections in the course of work, as payment is made for actually completed tasks
- Saving time. You won’t waste time evaluating indicators, planning, and other tasks, because you can discuss and correct everything as you go.
- Availability. You can easily intervene during the process, see which phase development is in, evaluate quality, and make changes.
Cons
- Difficulties with budgeting. In this model of cooperation, it is difficult to predict the price and calculate the budget.
- Lack of clearly defined deadlines. The amount of work is not specified before development starts, so you cannot plan how long it will take. A lot depends on the chosen service providers.
- Full immersion in the project. Since this is a volatile form of cooperation, you will not have to participate regularly in development or make certain decisions.
When to choose?
Among all engagement models, this one is popular with clients whose business and processes change regularly.
Conclusion
In summary, each engagement model has its own strengths. It’s hard to say which one to select. It depends on your business, its features, and its characteristics.
To avoid mistakes, study each engagement model, review your business processes, and choose the form of cooperation that suits you best. We cover the hands-on side in our staff augmentation.
- Versatility. You can quickly customize the drafting process. You manage all personnel-related stages, so you can quickly set team size and adjust headcount to match your business.
- High level of knowledge. Extensive experience, unique skills, and knowledge in your industry – all this you can get from specialists who will cooperate with you.
- Process adjustment. When you hire outstaffing specialists. You are in complete control of the entire process. At any time, you can correct the workflow.
Cons
- Difficulties with communication. Often, this model involves joint activities with companies in other countries. Therefore, you may face language barriers and other cultural differences in the developers’ country. It is best to discuss the language and cultural views with the future team in advance.
- Time Zones. Another point you may encounter is time zones. Time differences can make things difficult, but you can avoid them with the right measures. You can discuss the work schedule with the future team and agree on a time that works for everyone.
- The outcome is up to you. For the draft to be high quality, the customer must clearly understand what they want in the final product. To do this, you need to draft a clear specification and oversee the entire process. This responsibility lies with you.
When to choose?
As mentioned earlier, you need such a team when you need to scale up quickly or gain specialized expertise in a particular area.
Dedicated Team Model
One of the most popular IT engagement models is the dedicated team. With this collaboration, you will have a team at your disposal to handle the full development. This is very convenient for adjusting to the project budget. The customer manages the process; the contractor handles everything else.
Pros
- Budget savings. You reduce development costs because, with this cooperation, you don’t lose project quality but spend less by hiring a dedicated team. You save on equipment, space, and other necessary things.
- Process control for the project manager. Another advantage is that agencies provide a project manager who oversees the entire process and is responsible for quality.
- Expertise. If you need help only in a specific area, you may select the appropriate service provider, thereby gaining unique knowledge and skills in the area you need.
Cons
- Possible inaccuracies. The fact is that, as mentioned earlier, agency runners are responsible for control; therefore, in order to get the desired result, you must provide a detailed description of all tasks and processes, as well as explain in detail what you want to receive;
- Ignorance of the language and cultural characteristics. As with the outstaffing model, you may encounter language barriers and different cultural perspectives. It is quite hard to manage people from other locations.
- Declassification of information. Every business has its secrets, strategies, and other hidden information. For the supplier to create a unique solution for you, they must know as much as possible about you. Therefore, you will have to tell as much as possible about yourself, sometimes including confidential information.
When to choose?
A dedicated team suits long-term projects. This model is especially useful for a company that does not have many highly qualified employees in the required development area.
Technical Partner
A technical partner is a key role in IT engagement models. In short, you hire a company with extensive experience, including specialists from various fields such as designers, project managers, testers, and more.
Pros
- Effective solutions. With a large, balanced team and deep experience, they can ensure the best development for your business’s specific needs.
- Qualified specialists. You will have access to skilled specialists in design, testing, marketing, and other areas.
- Saving time. The contractor is fully responsible for all development processes, so you can focus on more important business processes.
Cons
- Not suitable for short-term projects as it is not profitable.
When to choose?
This type of interaction suits large, long-term projects that require many specialists. If your draft is exactly like this, feel free to choose a model.
Types of Contract Business Engagement Models
Less popular engagement models in software development include fixed-price and time-and-materials models. In this article, we will explore their features and characteristics in more detail and help you choose the one that suits you best.
Fixed Price Model
When choosing software engagement models, many prefer the fixed price model. A feature of this cooperation is setting a specific budget and discussing all the details, including timing, scope of work, equipment, and so on. Based on these details, you set a specific price.
Pros
- Proper budget allocation. You know in advance what the project will cost, so you know what to expect and how to manage the budget.
- A clear development implementation process. You discuss all stages and necessary work in advance, so the performer is less likely to make mistakes or omissions.
- Saving time. As in some other models, the performers handle the whole process, so you can allocate your time more rationally and focus on other important things.
Cons
- Lack of flexibility. If, in the end, there is more work or something needs to change because it does not fit, it will be hard to do this because the price and all conditions have already been discussed.
- Complicated assessment. For the performers to evaluate the entire work correctly, they need time. Therefore, because the assessment is complex, it takes considerable time to determine the final amount, which makes the process a little longer.
- Regular communication. To get the quality development you want, you should communicate with customers regularly. This can be tiring and time-consuming.
When to choose?
Many people prefer the Fixed Price Model over other engagement models in software development because it works well for small projects with a small budget and limited scope.
Time & Material Model
Another engagement model that deserves attention. The bottom line is that you pay for the work done. You pay for the work the developers have done.
Pros
- Simple to modify. You might easily make any edits and corrections in the course of work, as payment is made for actually completed tasks
- Saving time. You won’t waste time evaluating indicators, planning, and other tasks, because you can discuss and correct everything as you go.
- Availability. You can easily intervene during the process, find out at what phase the development is going on, evaluate the quality and make changes.
Cons
- Difficulties with budgeting. In this model of cooperation, it is difficult to predict the price and calculate the budget.
- Lack of clearly defined deadlines. The amount of work is not specified before development starts, so you cannot plan how long it will take. A lot depends on the chosen service providers.
- Full immersion in the project. Since this is a volatile form of cooperation, you will not have to participate regularly in development or make certain decisions.
When to choose?
Among all engagement models, this one is popular with clients whose business and processes change regularly.
Conclusion
In summary, each engagement model has its own strengths. It’s hard to say which one to select. It depends on your business, its features, and its characteristics.
To avoid making a mistake, carefully study each engagement model, examine your business processes, and decide which form of cooperation suits you best.
