Choosing the Right Saas Outsourcing Model
Before we can discuss which SaaS outsourcing model is right for your project, we should discuss some practicalities. SaaS (Software as a Service) is a versatile cloud-based development strategy. It encompasses a variety of online solutions and resources for customers (through applications, browsers, etc.).
This concept is being used by organisations all around the world for a range of commercial tasks. According to Kimberly Mlitz’s Statista report, the SaaS market was worth $145.5 billion in April 2022 and will be worth $ 208 billion by 2023.
SAS system creation and maintenance necessitate substantial financial resources as well as specialised knowledge. Such resources are usually unavailable to small or early-stage businesses. As a result, businesses turn to outsourcing providers to help them get a competitive advantage in the market, identify practical business solutions, and optimise the development process. So let’s get into more information about outsourcing SaaS development.
The Primary Advantages of Outsourcing SaaS Development
In a nutshell, SaaS outsourcing simplifies your life by assuming several duties. The service provider is responsible for the software’s quality, meeting all deadlines, communicating with the development team, and so on. They also provide all of the resources required for a successful project completion.
More specifically, the benefits of SaaS outsourcing are:
- Reduced project completion timelines, faster releases
- Reduced recruiting time and effort.
- Budget reduction.
- Advanced technological knowledge.
- Expert project management (including all modern methodology like Agile, etc.).
Choosing the right SaaS outsourcing model is vital, so today, we’ll be discussing the different options.
The Different SaaS Outsourcing Models
There are numerous SaaS outsourcing models available. They have distinct characteristics and advantages. We’ll go over the three primary models that are commonly utilised and meet modern standards:
- Part-time model
- Dedicated team
- Fixed-cost model
Each option has nuances, so let’s go over them in greater depth.
Part-Time Model
As the name implies, the part-time SaaS outsourcing model allows you to recruit specialists on a part-time basis. In most cases, startups or small businesses require expert developers for certain tech stacks or specific individuals for specific duties.
The mechanism allows for a pay-per-hour fee; there are no time constraints. You can also request all necessary revisions and subsequent project maintenance. In other words, you receive access to specific development services only when you need them and only pay for labour hours.
The Advantages of Part-Time Model
This solution is extremely adaptable and convenient. There are no overpayments, limits, or squandered hours. You receive the services you require and have the option to modify them in accordance with market demands. Part-time SaaS development outsourcing might be quite beneficial in unexpected scenarios.
Who Could Benefit from the Part-Time Model?
Part-time work might be an ideal alternative for projects that do not necessitate large-scale modifications or enhancements. In such circumstances, it makes little sense to pay for the entire team just to hire needed specialists on a part-time basis.
You can also use this strategy when you need developers on a temporary basis for a certain tech stack. It makes no sense to invest time and money on employing these people for the team when you simply require their skills for a certain assignment and for a limited time.
Dedicated Team
The dedicated team model is distinguished by the fact that you share all risks, opportunities, and areas of responsibility with the outsourcing provider. This system is similar to staff augmentation in that you have access to a cross-functional team that only works on your project. It can include everyone you need for your project, such as developers, managers, analysts, scrum masters, and so on.
However, these individuals function autonomously; they have their own system and regulations. For example, the outsourcing provider may modify this team without your knowledge in order to obtain better results.
Supervising and Management
The team is led by a manager, who reports on progress to you or your project manager on a regular basis. Your internal manager can also engage in team leadership and keep in touch with the outsourcing team.
It is also important to note that you specify all areas of responsibility, expected outcomes of collaboration, timeframes, and other critical aspects with the managed team from the start of collaboration.
The Advantages of Dedicated Teams
First and foremost, you have greater control over the development process. You can participate as much as you like. Second, a dedicated team emphasises good communication and greater coordination, allowing you to rapidly remedy mistakes and account for project subtleties.
Finally, this model is highly adaptable and scalable. You will be assigned an experienced cross-functional team to handle all of your product’s difficulties. And because they share your difficulties and obligations, these guys become a part of your company.
Who Could Benefit from a Dedicated Team?
A managed/dedicated workforce is ideal for long-term SaaS product outsourcing. You will undoubtedly require more upgrades and modifications, and this model provides you with ample options for flexibility.
This solution is especially useful when your personnel lack the necessary expertise and abilities for continued project development. You can make use of the specialised team’s knowledge, professional competence, and experience without having to waste time looking for uncommon specialists.
This model is especially useful when your crew is overburdened and you need to find a full team for a new project. You can trust any assignment to the outsourcing team because it shares your obligations and risks. Of course, only if you can discover a trustworthy provider.
Fixed Price Model
The set pricing model, as the name implies, entails determining the whole cost of development services before beginning cooperation. Both the client and the supplier may be at risk with this approach.
On the one hand, the customer may need to change the specifications or scale of the project during the development period, which the fixed price model does not allow for. On the other hand, the provider may not understand the project’s characteristics and intricacies or estimate the number of person-hours required to complete the task. In this situation, the SaaS outsourcing company loses money.
As a result, experience and extensive understanding of both the client and the supplier are essential for successful cooperation in a fixed pricing structure. As a result, a responsible agency would first examine your needs list and execute the essential analysis. Only then can the true value be known.
It is critical to organise and structure all information and tasks, and to lay them out clearly in the documentation. In this situation, you pay the agreed-upon amount for the completed product.
The Advantages of Fixed Price Model
The set price model allows you to know the cost ahead of time and organise your budget more easily. Consequently, you can receive what you need without paying too much. Furthermore, you agree on timelines so that the finished project is delivered on time. Again, assuming you select the right SaaS outsourcing vendor.
Who Could Benefit from a Fixed Price Model?
This model is not suitable for huge projects that require flexibility and complicated modifications. It has no space for improvement. You can only receive what you’ve previously discussed. Furthermore, you have no control over the outsourcing team, making risk management extremely difficult.
You can, however, use this option for specific jobs or a short project with little requirements. Again, your duties should be as simple as feasible, and your project deadlines should be as short as possible. Most of the time, such a model is useful when you need to add certain features or make minor modifications.
Partner with Noon Dalton for Your Outsourcing Needs
It is becoming increasingly impossible to envision how businesses can succeed without outsourcing, as the practice is growing more widespread and is already widely accepted as a necessary component of daily operations. You should think about outsourcing your tech tasks if you can find suitable partner who has the tools, know-how, and resources to get the job done.
Trust is the last, less visible advantage of outsourcing your tech operations. When it comes time to make a decision, examine the advantages to decide which course is best for you and your business.
Feel free to reach out for more information, our team is standing by to help.