Moving from Project-based Outsourcing to Retained Teams

Outsourcing, especially project management for the information technology sector and related industries, has been on a continual upward curve on the popularity stakes. Particularly in the case of outsourced CAD services in the architectural and construction sector, the range of expertise that can easily be accessed by firms through outsourcing has been expanding for some time. Additional incentives include access to technically proficient human resources for a reduced cost. Lately, the tendency to hire an outsourcing firm for a single project, or project-based outsourcing, has been replaced by a growing preference to hire retained teams. Strategic vision steers a new path, where several advantages in opting for retained teams are revealed.

Reasons for outsourcing a particular task, project or process may vary, but the assured benefits remain a pleasant constant, namely:

• Increased focus on core business – by outsourcing tasks and processes, in-house staff can concentrate on core business initiatives and strengths, considering future strategy
• Increased efficiency - an offshore resource specialising in specific, required processes increases productivity, efficiency and helps produce higher quality
• Cost control - outsourcing reduces costs, which can help firms invest in other areas
• Increased scope - expertise and infrastructure otherwise inaccessible or unaffordable can be made accessible and affordable through outsourcing

Outsourcing is cost-effective, flexible, provides high-quality service and enables firms to adapt to new challenges and conditions.

Project-Based vs Dedicated Team OutsourcingTypically, outsourcing has been implemented as a project-based model, since most firms receive project-based budgets. A project is developed by a third party, and the third party is used only for the specific project in question. With an evolved strategic vision in place, an increasing number of firms are veering towards a dedicated team model of outsourcing. This outsourcing option involves hiring a group of third party developers that report to and work full-time for the project firm but remain situated in the outsourcing firm’s premises. This could be an entire developmental team that handles a project from start to finish or this dedicated team may cooperate and collaborate with the in-house developers. The dedicated team model is also known as staff augmentation or outstaffing.

Pros and Cons of Project-Based Outsourcing

During the process of project-based outsourcing, the entire requirements of a project are communicated and explained to project managers, business analysts and other members of the outsourcing company. A development team is formed to see the project from its initial stages through to its completion.

Pros- The outsourcing company is entirely responsible for the progression of the project, beginning to end, leaving the original firm free to work on other requirements.

• The outsourcing company’s development team will manage the project and ensure quality control.

Cons- There is limited control over the project and its development.

• Cost may increase with extra services rendered, such as project management, business analysis and quality assurance.
• The entire specifications and details of the project must be provided right at the beginning.
• Misunderstandings could prove costly and cause delays.

Pros and Cons of Retained Team Outsourcing

Pros- A retained team that only works with one customer means that quality levels and efficiency are achieved more easily and usually much faster..

• Greater flexibility results in project costs, as resources can be exchanged when requirements change, and usually a fixed monthly cost with no overheads or hidden fees.
• Training a retained team provides ongoing future benefit as opposed to single project benefits. This improves the ROI of future projects.
• Team retention improves as staff do not move from project to project but instead work in single teams and build relationships – which form a key component of job satisfaction.
• A retained team is typically discounted compared to project-based team costs.
• Highly skilled and competent resources, including qualified architects and engineers on a retained team, are focussed on one project.
• A dedicated server with backups provides information security and storage controls.

Cons- Constant communication is required with the development team.

• Some risk is absorbed as ongoing commitment to use and pay for the team.

Since communication is essential for any type of outsourcing, the constant communication required for dedicated teams is a small price to pay, considering its many benefits. Generally, in the case of short-term projects of smaller overall dimensions, where the project requirements have been finalised and for which constant monitoring is not required, project-based outsourcing may be preferable.

In the case of a large-scale project which may take a longer time to complete, outsourcing with a dedicated team enable changes to be made as and when required and makes it easier to monitor both the project’s progress and the development team’s functioning. Also, having a dedicated team ensures that it is an extension of the original firm for further projects in the future. The dedicated team knows how to relate to the in-house team and is comfortable with the processes followed.

Increasingly, Western firms are looking eastward, particularly to India, in search of these dedicated teams. Vast groups of Indians are technically qualified and experienced in Revit BIM (building information modelling) to complete the various tasks involved in large construction projects, and many Indians speak English, helping communication between Western firms and dedicated teams overseas. Costs for Revit outsourcing services are more economical when outsourced to India, and dedicated teams in India ensure thorough quality control for services provided so that they can extend the business relationship well into the future. Revit architectural services provided by Indian outsourcing firms include offshore Revit modelling and offshore drafting.

The move from project-based outsourcing to using dedicated teams that are outsourced is a growing phenomenon and one well-suited to the requirements of large companies handling large projects. For Western firms, profitable and efficient solutions beckon from India, with its technically qualified professionals and dedicated work ethic.