Distinction between Project Companies & Dedicated Team Models

Posted by InterVenture on April 1, 2019

All businesses strive to get the most out of the least amount of money. In the past, this would have meant doing everything in-house. However, with modern technological innovations, this is even more attainable by utilising new models.

One concept that helps companies save resources is outsourcing. This is where some or all the work is moved to a third party service provider. If used in the proper manner, it could have some major benefits in terms of cost savings. This article will examine two common models used in outsourcing: Project Companies and the Dedicated Teams.

Project Companies

In this model, projects are delegated to third parties to be completed. The outsourcing company will have to be explicitly informed about the purpose of the project. The company will then have to form a development team and see the project to completion. The main benefits project companies offer are cost and time savings when compared to in-house teams as the project is carried out externally by specialists who deliver the requested work on time to the highest standard.

One of the main disadvantages of this model is the limited control that a client has over the project. In particular, the engineers and project managers are always in rotation. Thus, clarification of the project may have to be given several times as new members join the project team. Additionally, because of the short-term character of the projects and the employee rotation, the software engineers developing the requested software are unlikely to identify themselves with the work delivered or the company they are indirectly working for.

Furthermore, in traditional project companies is the issue of the lack of direct communication between the project managers and the client. Most of the communication takes place via intermediaries that represent the two firms. During this process, there is always a risk of miscommunication, which could prolong the duration of the project.

Due to limited communication, the chances that the delivered work will be of the highest quality with tangible value addition are unlikely. The client may not feel true ownership of the project outcome once it has been completed.

Dedicated Own Team Model

This model entails several decisive advantages when it comes to outsourcing complex projects and is, therefore, a more reasonable cooperation model. In this model, the service provider and client work closely together and build a sustainable, long-term relationship. The client’s needs are examined in detail and, depending on project requirements, team members are consciously assembled in order to ensure an efficient and high-quality product development.

In short, the company is able to benefit from an extension of the internal team without having to deal with employee recruitment and training. The own team model allows for knowledge accumulation and retention as the know-how and expertise the dedicated team possesses is passed onto internal employees. Besides that, communication between the project team and the client is flexible and productive.

The client usually has leeway to assign their own project manager or use the service provider’s project manager. This reduces turnover, which ensures that the client has a sense of ownership once the project is done. With this project, there is a huge potential for innovation and initiative as the developers are encouraged to express their creativity by embracing new ideas and new technologies. As a result, the project can end up achieving more than what was primarily envisioned by the client.

Both of the above models have their benefits depending on the nature of the project and the client’s requirements. However, the own team model is more advantageous.

Here at InterVenture, we recruit the desired developers according to the skill requirements of our clients’ projects and create your tailor-made team. This is how we ensure the necessary technical knowledge of individual team members, but we also take comprehensive measures to maintain an efficient nearshore operating model fostering the most effective development results.