Software Outsourcing Models: Location and Relationship

Software Outsourcing Models

Outsourcing software development has gained popularity and appeal among tech enterprises.

To remain competitive in the market, business organizations have embraced outsourcing software development. These businesses are aware that using one or more kinds of outsourcing helps them to create and execute their plans more rapidly, locate some of the finest people with the required talents, and make better use of their resources.

It’s not always enough to buy a pre-existing solution for your company. It either doesn’t have the features you need or doesn’t work well with your present tech stack. Since you lack the time or resources necessary to produce this kind of product on your own, you have decided to seek the help of an outsourcing development company. Which form of software development outsourcing should you pick?

Software Development Outsourcing Models

Software Development Outsourcing Models

Location-based and relationship-based outsourcing models for software development are the two most prevalent types. Let’s begin by knowing these two sorts right away.

Relationship-Based Outsourcing Models for Software Development

Relationship-based outsourcing refers to the division of ownership and accountability between the customer and the outsourcer.

Staff Augmentation

The goal of staff augmentation, which is comparable to the team extension approach, is to fill in any holes in your team. If you need to recruit outside engineers, often on a Time and Materials contract, this strategy is suitable. This paradigm is advantageous for those seeking flexibility and is readily scaleable. This option is perfect for people who need more specialists to create an extra component of their product.

In contrast to the team extension approach, the project is fully handled by your business, and the outsourced staff members are external developers.

Dedicated Team

The supply of outsourced software development services using a specialized team is relatively common. That occurs when your outsourcing partner assembles a specialized team that works just for you.

It is comparable to having in-house employees that you manage without having to deal with the hassle of recruiting, employing, and training them. Depending entirely on your demands, the group may consist of one or more specialists.

Project-Based Model

When you are aware of the precise requirements for the sort of project, this is the most appropriate and widely used model. Alternatively, when you are certain that you understand the job’s criteria. In this case, the project’s whole development would be handled by the contracted team. The outsourced team manages the full plan and all of its duties in this sort of outsourcing strategy.

  • Companies choose this kind of model in one of two situations:
  • When they don’t have a large enough internal staff to handle the development project;
  • When they don’t want to dedicate full-time internal staff to this work.

Outsourcing Approaches for Software Development Based on Location

Outsourcing Approaches for Software Development Based on Location


This kind of collaboration requires allowing your contracted workers access to your workplace. If you just need a few professionals to expand your local team, the concept works effectively. In order to launch a product, the hired experts work from your office and join your team temporarily.


With onshore outsourcing, skilled workers are located in a separate city or town inside the same nation but work remotely. This strategy expands the pool of technical talent without raising internal costs.


In the nearshore outsourcing business model, a customer engages a development team from a nearby nation. Often, the time zone difference between your home nation and a nearshore country is less than three hours.


Offshore outsourcing is the practice of using a development’s services that is situated in a different nation, often on a different continent. Because it is the most cost-effective outsourcing model, many organizations adopt this one. Without having to invest a lot of time and money in the recruiting process, you may decide to work with the least-priced developer who satisfies your quality expectations.

Working with a reputable outsourcing provider, offshoring is a great choice for companies of any size and budget.


IT services account for 72% of total worldwide outsourcing contract revenues. All more or less successful companies sooner or later come to outsourcing. If you are already at this moment, then now you should be able to distinguish various outsourcing models now and use them appropriately for your purposes.

Both outsourcing providers and clients may benefit from the market’s limitless prospects. You have the opportunity to produce something that would be impossible without a strong team.

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