OUTSOURCE MODEL 101
Tags: startup, discuss, productivity, agile
Published: 2022-06-24 08:38:59

**Outsourcing **can be a great way to bring in new skills, but it’s also a way to make sure that your business is protected, both financially and legally. If you choose the wrong model for your company, however, you could end up wasting money and losing credibility with your clients.

The software development industry is a rapidly growing field, and there are many types of companies that specialize in providing various services. In this article, we will discuss the two main types of services that software development companies usually provide: project-based service and team-based service.

## Project-based service

Project-based services are the best option for clients who need to complete a certain project and want to avoid dealing with the daily coordination and management of a team.

The project-based service allows you to hire a team that will work on your project, while you can focus on other things (for example: build a mobile app, build an online shop etc). It is ideal if you are working on a large scale project and do not have enough time or resources to manage it yourself.

This type of service is also beneficial because it allows you to get the best possible results, since professional teams have more experience than individuals working on their own.

Depending on the customer's preferences and the level of details the project scope is described with, a project can be implemented in two ways:

- 
**Fixed - price project**: In this model, the client commits to a fixed timeline and budget for the project, and then works with the service provider to define what kind of service they're looking for. The service provider commits to delivering that service within those parameters, and then goes back to the client with a proposal for how much it will cost.This way, we can confidently make promises to our clients about what we're going to do for them and how long it will take us to do it. This enables us to be more efficient in our work because we don't have to worry about getting our estimates wrong or changing priorities midway through a project.

- 
**Time-and-Materials Project:** also known as “cost-plus contracts”, are the most common type of contract in professional services. This type of contract implies that the client pays for every hour spent by the project team regardless whether the estimates were accurate or not. The client usually can't demand compensation if the project takes longer than expected, at least from the contractual perspective.

## Team-Based Models

The key difference compared to the project-based models is that instead of paying for the project delivery, the client pays for the team set-up and availability. This means that instead of hiring one person who will be working on your project, you hire a team of people who specialize in certain aspects of your project.

The thing about software development is that it's not just about building something. For a long time, we were happy with what we had: Each project was a separate "project" with its own deliverables and strict deadlines. Clients were given the opportunity to provide developers with tasks, and developers were expected to complete them within the budget and timeframe specified by their clients.

> **But today, things are different: we don't just have projects anymore—we have people.And when you work with people, you need to find ways to make sure that everyone is on the same page: that everyone understands what needs to be done, why it needs to be done (and how), and how long it's going to take.**

It's no longer enough for a client to simply tell a vendor "I need this feature added to my website." Today, you need to understand why that feature matters—and more importantly, how it fits into the bigger picture of your product or service as a whole.

When you hire a team of developers to work on your project, you're not hiring them to complete a particular project within a certain time-frame and budget. The result is completely different: instead of being provided with a deliverable product, the client is provided with people who will work together to create the product.

The quality of each individual team member is still a vendor's responsibility, though. Team members are selected by the client with our recommendation, based on their skillsets, experience, and fit for the project. The client can replace team members at any time during the project if necessary.

If you’re considering outsourcing, look no further than Atomate Software. We know that each company is unique, which is why we tailor our approach to suit each individual business.