Software Development Outsourcing: Which Mode to Choose

As we have seen in this article, delegating outsourcing development activities is an excellent way to optimize resources, reduce risks, and shorten time-to-market. However, it is essential to carefully evaluate the collaboration mode with the development service provider, as it will significantly impact costs, organization, and the final output.

The first step is a thorough analysis of the project's requirements and the company's needs. Once these points are clarified, it becomes possible to choose the most suitable collaboration model. Let's explore the main types, their pros and cons, and the contexts where they are most suitable.

Body Leasing or Team Leasing

What is it?

Body leasing or team leasing (when involving multiple professional figures) is a form of outsourcing where an employment agency acts as an intermediary between the client company and the developer. In Italy, it is often known as "body rental."

When to choose it?

This model is suitable for companies that need one or more specialized professional figures in the field of development and programming for a specific project but do not have the structure to internally hire a professional with a specific expertise.
For example, an insurance company might adopt body leasing collaboration to implement custom functions within its CRM. This is a short-term project that requires specialized resources that the company would struggle to identify and guide in carrying out the tasks, due to lacking the necessary know-how.

How does it work?

The employment agency, in agreement with the company, identifies target professional figures and organizes interviews to verify the candidate's technical and soft skills. If successful, the developer begins to work exclusively for the client, usually at their premises.

The advantages for companies

• Relatively short start-up times.
• Possibility to have one or more highly specialized figures operational at their location.
• The company does not have to deal with the legal or administrative aspects, which remain the responsibility of the employment agency.

Downsides

Compared to the USA, the UK, and other countries where body leasing is perfectly common and legal, in Italy this type of collaboration has unclear boundaries, which is why many companies choose not to adopt it, preferring solutions like a dedicated development team, which we will discuss shortly.

Team Augmentation and Dedicated Team

What is it?

With team augmentation and a dedicated development team, we refer to a team of developers hired by the software house, operating for a single client for a certain period of time. In both cases, the software house takes care of occupational aspects such as benefits, office space, vacation, work tools, professional development, wellbeing, and team building.

When to choose it?

Team Augmentation is a true extension of the existing development team and is ideal in cases of insufficient personnel. The technical leadership and project management usually remain with the client, while the development company provides the know-how and experience gained in other projects.

The Dedicated Development Team, however, consists of a more autonomous team of developers working full time for a client of the software house. The technical leadership and project management are the responsibility of the development company.

The advantages for companies

The great added value of these collaboration modes is undoubtedly the experience and know-how that professionals can offer to the client company.

In terms of costs, these solutions are almost always cheaper compared to internal recruitment. Even though the initial burden may seem comparable to an employee's salary, it must be considered that the provider bears costs like workspace, equipment, benefits, training...

Through Team Augmentation and Dedicated Teams, it is possible to have a specialized team, continuously trained and updated, while containing costs and maintaining flexibility in the recruitment process, increasing or decreasing the team as the project's needs change.

Downsides

A potential issue is remote collaboration. Unlike body leasing, the resources involved in the project do not always work at the final client’s location, but at the software house's offices or—very often—remotely. Communication or project management at a distance might require extra effort, but more experienced providers have processes to simplify collaboration and keep all project stakeholders informed.

At Astrorei, for instance, we adopt an agile approach, which combined with the use of collaborative tools, allows us to work remotely successfully.

Are Team Augmentation and Dedicated Teams suitable for my company?

The team augmentation and dedicated team software development models are perfect for medium and long-term projects.
If you need developers to work closely on your project and the quality-price ratio is an essential factor for your company, this is the best solution.

Project Team

What is it?

This mode consists of a project-based collaboration, establishing a goal that the team must achieve within a certain timeframe and budget.

When to choose it?

This work model works best if you want to fully outsource software development and let another company handle your project independently. One of the most common situations where this mode is used is the development of a Minimum Viable Product.

How does it work?

It is definitely the least complex cooperation model as it essentially involves assigning one or more well-defined operational tasks to an external agency to avoid engaging internal resources. Costs are generally billed based on actual time or a package of hours.

The advantages for companies

• Possibility to leverage experts' know-how for specific activities like web or mobile development, IT consultancy, UI/UX design, and other parts of software development.
• Optimization of internal resource workload.

Downsides

The main disadvantage of this work model is the price, often higher compared to other solutions.

Is a project team suitable for my company?

The project model works best for small projects. It is a good option if you want to work with a partner with extensive technical skills and need flexibility, or if you do not have internal IT teams and outsourcing is the only option.

Astrorei: a team of specialists for your project

We assist companies from various sectors in meeting their technological needs by offering a team of highly specialized software developers and the know-how of our software house. Want more information on our dedicated development team? Contact us!