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Outsourcing software development/pricing models

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victor21311212 GBR Level 1 | All posts
Hi everyone. I've read once that a man here wrote that outsourcing software development will stop in 5 years (that post was made in 2012 right in this section, but I don't want to bump that thread, and I decided to start a new one). So, I would like to say, that outsourcing software development is still alive and is in great demand, and I've hired an outsourcing team for software development. But, I've faced a great problem. I didn't decide what pricing model to choose in order to not to lose a lot of money. Could anyone suggest a reliable pricing model?
Correction: it's potentially true, absent proper checks and balances.

Couple companies I know in India, very big ones, for major accounts will put a PM on both ends. Also, you need to work with offshore, in their time zone and follow up follow/through in daily scrums for a couple hours/day if necessary. Change your work hours. Throwing things over the fence and expecting it to be right the next day, which you can to some extent do with onshore, is a huge setup to fail.

Assume the architect is onshore, I don't see this working when he's offshore. That person is a driver. If it's you, great. Work with the onshore and offshore PM: the onshore should be communicating with the offshore in a way s/he understands. The offshore PM needs be very Western in his or her thinking. I've met few good Indian female PMs, and more than a few good male ones. It's a skill set just a little alien to their culture, I'm not jamming on them.

It's tricky: I've seen great product, and horrible garbage. A real gamble unless you have a major account, typically millions$, with an onshore account manager. Further, if you can send your men offshore to work with the team, they'll straighten them out real quick. Done that, as a PM, and made them accountable to themselves and the product. They want to be successful, but be careful as when onsite in a host country, it's even harder to shake off their bad habits.

Their worst habit, by-far, is bureaucracy and lack of urgency. That's India. Other countries, different situation.
ROM Level 1 | All posts
The most reliable? What do you call "the most reliable"? By the way, it depends on the person, as, for example, some people prefer predictability of pricing model, some people prefer optimal timing. There is no perfect solution, so you should choose by yourself what's the most important for you. For example, recently I graduated from University and there we studied some pricing models, but my preferable pricing models for IT outsourcing were models listed on this site. Yeah, these models aren't perfect, so you will have to chose by yourself what pricing model to use
DEU Level 1 | All posts
Hi, thanks for a great post. If you want to understand the new business model, then I advise you to visit and learn about Etsy competitors, where you can get acquainted with all the subtleties and nuances.
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