Advantages of Dedicated Teams over Traditional IT Outsourcing for ISVs

Anirban Guha

Increasingly ISVs and technology companies are confronted with capacity bottlenecks, and lack of technology talent with the requisite exposure in their native environments. As a result, they are unable to handle a multitude of challenges such as migration to a SaaS mode, up gradation of their technology stack, enhancement of product functionality and customization requests. At the same time, ISVs are reluctant to resort to traditional IT outsourcing, as they are primarily worried about of lack of dedicated resources from the service providers, and also unsure about the efficacy of offshoring and distributed development in a product development environment.  

In this blog, we will share with you some of the relative advantages of dedicated teams as opposed to conventional IT outsourcing service model:

Traditional Outsourcing ModelDedicated Team Model
Time-To-MarketUncertain, dictated by the nature of engagement with the service providerGuaranteed reduced time-to-market, as the customer is in complete control of the team, work flow and deliverables
Innovation & CapabilityLow level of task based reactive output with little incentive for innovationHigh performance, proactive teams capable of significant value addition in sync with the customers native team
Business ValueLow, very basic staff augmentation modeHigh, direct contribution in delivering measurable business value to customer
Risk MitigationDifficult to anticipate and manage risks due to lack of visibility into service providers processes, team management, and resource movementsEasy, due to complete managerial control over people and processes and negligible risk of attrition and resource movement due to locked-in resources
Ownership/Span of controlOwned by service provider, low level of integration with customer’s teamOwned and managed by customer, complete integration with customer’s team
EngagementBasic, and hands offMature, and collaborative
Success factorsVendor selection, service provider’s maturity and retention of same team across delivery cyclesTeam selection, product development know-how, and dedicated high performance teams
Contract ManagementSignificant attention to detail required in contract planning covering all aspects of the engagement, and adequate foresight needed to provide for contingenciesSimple, and easy to interpret contract based on “people+cost of shared services” model
Scope & FlexibilityRigid, need clearly defined scope and deliverables from the customerFlexible, driven by customer’s requirement and adaptable to changing business dynamics. Inbuilt agility, decide as-late-as possible and start as soon-as-possible
Team composition and qualityDictated by the service providerControlled by the customer right from the recruitment process including roles and composition
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As a founder, CEO, or CTO of an ISV, take advantage of dedicated team model in a distributed development model, gain additional development capacity, execute your product roadmap, and realize your business goals.

Download the ebook, if you want to learn more about how to benefit from dedicated teams and realize your product vision!