How Much Does It Cost to Outsource Software Development?

  • how outsourced specialists get paid.
How much is it to outsource developers?
  • the product’s type and complexity (the feature set, third-party APIs, native or hybrid app, Android or iOS — all of these and many more choices will affect the cost estimates)
Payment models in IT outsourcing
You can use one of these popular ways

TIME AND MATERIALS

It is used when it’s difficult to determine the cost of a project in advance. With this approach, the price consists of the payment of the time spent and the resources of the team.

  • Efficiency. You can change the plan or requirements for the finished product right on the way;
  • Result: the result is visible at all stages. You can continuously monitor the process.

AGILE VALUE

A modern way of pricing when working on an IT project. The calculation takes into account the volume of work performed, team costs, and even competitors’ prices. The work is divided into short periods — sprints.

  • Clarity. The customer sees the result at the end of each sprint.
Photo by Patrick Perkins on Unsplash

DEDICATED TEAM

Specialists are assigned to a specific project. They receive monthly/weekly (negotiable) payments + administration costs.

  • Control. You fully control the work and distributes the workload between each performer;
  • Cost reduction. Developers have deadlines that they adhere to, and more specialists can be hired if necessary.

FIXED-PRICE

Most often used when working exactly with outsourcing companies. The customer doesn’t need to know how much it costs to outsource, let’s say, a website development, since a manager of the partner company will be responsible for calculating the cost of all works. At Exceed Team, we use a flexible pricing approach and will always help you determine the work you need.

  • Accuracy. All stages of work are discussed before the start.

HOURLY RATE

As the name suggests, this is an hourly wage payment model. It is good for small projects, for example, when you outsource app development. Here at Exceed Team, we often use this approach. The technical specialist determines how much time a developer will spend on a specific task.

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