In the past, Bridge has always offered the dedicated team model. Because we truly believe this is the most effective delivery model in an offshore situation, we have recently started shorter-term contracts. Where we previously used a minimum duration of 6 months, we now make it possible to hire people for any period from 1 week. The response from our customers is very positive and after launching this initiative 2 weeks ago, we already embraced 3 new customers.<\/p>\n
We hope to receive some feedback from readers on our considerations on our business model. Maybe you have a different view, suggestions for changes in our models or you agree with our considerations; please share it with us.<\/p>\n
Dedicated team or fixed price?
\nThe past few years, Bridge has experimented with several delivery models. The two models we have built and used most for our customers are \u2018fixed price\u2019 and \u2018dedicated team\u2019. And every day we are wondering: which of these two models delivers the highest value to our customers and makes offshoring work most effectively?
\nFixed prices have one crucial pre-condition: it needs to be clear what exactly has to be built, when it is not, the estimate of the workload will be completely wrong. And more often than, people are wrong about the workload. As with building houses, I have never seen a house being delivered in time and according to plan. Web\/software suppliers \u2018protect\u2019 their profit margins against wrong estimates by adding a big margin in the hours and in the hourly rate. The result is higher pricing and a lot of energy spent on the question \u2018how much will the project cost\u2019 and \u2018what can be charged as extra work\u2019.
\nNow the primary \u2018problem\u2019 that companies are solving by outsourcing their IT is \u2018capacity\u2019. They need people to run their IT-operations (be it a system, an application or a website). There are several options to run your IT:
\n–\u00a0\u00a0 \u00a0Hire IT staff on your payroll
\n–\u00a0\u00a0 \u00a0Outsource the IT operations to an external company
\n–\u00a0\u00a0 \u00a0Hire freelance IT persons
\n–\u00a0\u00a0 \u00a0Hire temporary people from an external employment agency
\nFrom the experience at Bridge, I believe the strongest model for running IT operations is having your \u2018own\u2019 dedicated people, operating in a team where the team members know each other and have a strong team spirit. To build that team, hiring people on your payroll may seem cost-effective and easy. Apart from the fact that often it is not as cost-effective as it seems (overhead, illness, holidays, etc), your company becomes less flexible (hire\/fire) and internalizes a skill that is often not the core business.
\nAnother option is hiring external experts. This ensures flexibility and ability to hire the right skills for the right job. But the costs are substantial if you hire these experts locally. Besides, it is usually not possible to hire local dedicated teams. The local outsourcing relationship is by default customer-supplier, because hiring a full time dedicated team from a local supplier will incur high costs without any advantage over internal staff.
\nIn an offshore situation, companies are able to create a situation where they are able to hire dedicated teams while keeping costs below or at the same level as hiring staff internally. The outsourcer can select the team members, train them and build a strong team that can work for the company for the long term. The bottom line in this way of organizing is that the outsourcer is always flexible in his capacity and has no long term employment engagements.
\nHaving a dedicated team has a few advantages over making fixed price arrangements:
\n–\u00a0\u00a0 \u00a0The need for 100% clear specifications disappears (because the requirements can be developed partly onshore and offshore +\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 projects can be organized using agile methodologies).
\n–\u00a0\u00a0 \u00a0There are no disputes about the workload needed to complete a project
\n–\u00a0\u00a0 \u00a0Strong relations are developed between the internal staff and the offshore team
\n–\u00a0\u00a0 \u00a0The model is more cost effective (the supplier doesn\u2019t need to add a \u2018security markup\u2019)
\n–\u00a0\u00a0 \u00a0The outsourcer has full control over planning
\n–\u00a0\u00a0 \u00a0There are no communication layers, all communication is straight between the outsourcer and his team (in fixed\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 arrangements, several layers of project management are often needed)
\n–\u00a0\u00a0 \u00a0Knowledge can be kept with the outsourcer (his team will keep the knowledge, whereas in fixed arrangements, team members\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 will often be replaced to other projects)
\nIn the past, Bridge has always offered the dedicated team model. Because we truly believe this is the most effective delivery model in an offshore situation, we have recently started shorter-term contracts. Where we previously used a minimum duration of 6 months, we now make it possible to hire people for any period from 1 week. The response from our customers is very positive and after launching this initiative 2 weeks ago, we already embraced 3 new customers.
\nWe hope to receive some feedback from readers on our considerations on our business model. Maybe you have a different view, suggestions for changes in our models or you agree with our considerations; please share it with us.<\/div>\n
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The past few years, Bridge has experimented with several delivery models. The two models we have built and used most for our customers are \u2018fixed price\u2019 and \u2018dedicated team\u2019. And every day we are wondering: which of these two models …<\/p>\n","protected":false},"author":4,"featured_media":43478,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,14,5],"tags":[],"class_list":["post-594","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bridge-news","category-offshoring","category-outsourcing"],"featured_image_src":"https:\/\/www.bridge-global.com\/blog\/wp-content\/uploads\/2009\/11\/Dedicated-team.jpg","author_info":{"display_name":"Hugo Messer","author_link":"https:\/\/www.bridge-global.com\/blog\/author\/hugomesser\/"},"_links":{"self":[{"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/posts\/594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/comments?post=594"}],"version-history":[{"count":3,"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/posts\/594\/revisions"}],"predecessor-version":[{"id":43479,"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/posts\/594\/revisions\/43479"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/media\/43478"}],"wp:attachment":[{"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/media?parent=594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/categories?post=594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bridge-global.com\/blog\/wp-json\/wp\/v2\/tags?post=594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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The past few years, Bridge has experimented with several delivery models. The two models we have built and used most for our customers are \u2018fixed price\u2019 and \u2018dedicated team\u2019. And every day we are wondering: which of these two models delivers the highest value to our customers and makes offshoring work most effectively?<\/p>\n