James S. Grisham
"I always try to be pessimistic at start and optimistic at the enf of project..."

Being a flexible and Client-oriented business, Offshore Software Development offers a number of elaborate models of co-operation. There are no good or bad models. Each of them is associated with its specific benefits and is suitable for a specific business case. Choosing the one of all available models is a thought-out decision based on the analysis of the specific needs and requirements.

The Offshore Software Development models differ by the level Client’s involvement in the process of Software System development and management processes and level of offshore programming team’s dedication to IT Project.

The highest level of Client’s involvement and interaction is provided by joint-venture model. It means establishing a joint venture with an offshore partner for achieving mutual benefits. Usually, cheap workforce is the basic benefit for onsite partner, and partnership with solid foreign company is the priority for offshore co-owner.

This model requires significant investments from onshore party. Because the value must be recovered, this model is suitable for long-term projects. There are examples when joint-venture Offshore Software Development model resulted in complete merger with offshore company and establishing of operations in foreign country.

Offshore Development Center is a model providing offshore programming team working full-time over a single IT Project. This remote group of Programmers may either implement programming tasks alone or work over the overall Software System development IT Project (Software System architecture and design, coding, testing, deployment).

In this Offshore Software Development model Client or customer’s onshore team is responsible for the majority of management functions as well as for requirements specification and risk management. Normally, in such a model fees are fixed and paid on a monthly basis. Permanence of offshore programming team is the key benefit of this model. Because the fees are paid on a monthly, but not hourly basis, this model is suitable for long-term or permanent projects when IT Project management team is available onshore.

Offshore/onshore model is a good choice for outsourcing small and terminal projects. It means outsourcing a IT Project to onshore company with offshore operations. Commonly such companies are headquartered onshore providing sales and management activities in the customer’s country, and have an offshore Software System development center for technical tasks such as designing, programming, testing, etc. The advantage of this model is that Client communicates with onshore provider but pays offshore price. Still, this model is more expensive than pure offshoring model.

Pure offshoring model means outsourcing individual Software System development projects to one or more (multisourcing) Offshore Software Development service providers. This is the most risky model however it is the most profitable for small individual projects. Service provider is responsible for the whole IT Project management, and efforts are paid on hourly basis.

Selection of any of these models must be a result of detailed analysis of specific business needs, goals and prospects.

First writen online on 8/5/2007