Cost Reduction in Net Development Outsourcing
#Custom software development
#.NET
SHARE
Jun 13, 2021
Fundamental Outsourcing Pricing Models to Consider
Businesses are increasingly outsourcing net development. The three main engagement models that companies can use to engage offshore or nearshore developers are described below. There are four basic pricing models that can make outsourcing financially viable. Majority of companies are aware of these pricing models, but not all of them are familiar with the engagement models that can reduce significantly the overall costs spent on outsourcing net development services.
In this blog post we will review the major ways in which outsourcing costs can be reduced. In the course of this research we will review which billing plan is crucial for business and in which way outsourcing can help to achieve cost reduction.
A better understanding of each billing plan is crucial for businesses who are pursuing outsourcing as the major way to reduce their costs.
In this article, we will discuss the following fundamental pricing models:
-
Time planning with resource evaluation
-
Contracts with fixed prices
-
CAP plans
-
Plan monthly flat rates
Time planning with resource evaluation
With this model, which is the most common, you can establish a long-term relationship with the outsourcing company.
Businesses which do not have a clearly defined goal, specifications, product features, and strategies to achieve their goals will benefit from a flexible time management.
It's impossible to know how much a service will cost until you will start implementing your project. Only after studying your project, a dedicated team of software developers will be able to determine its final cost.
Clients should note that the additional costs will be incurred as they will be needed for purchasing software and hardware.
The pricing plan should be considered by large organizations and companies. An individual client's contract and collaboration details can be easily changed to meet the ever-changing needs of your potential customers.
Depending on the skill level of the employee, the service provider can set a daily, weekly, or monthly wage.
It is crucial that parties establish communication between themselves in order to ensure the consistency of the work process and verify the final deliverables of your project.
Fixed-Price Plan
The promise of fixed prices allows businesses to plan their budgets in advance on the basis of the total project costs.
In order to implement this plan, the client will need to conduct an extensive research, prepare project specifications, and agree in advance on the project's requirements. Upon defining all details, deadlines will be set and a fixed price estimate will be provided based on all these calculations.
By arranging short-term collaborations and getting the job done based on existing requirements, companies wishing to develop a relationship with software developers improve their work collaboration and the overall effectiveness of project cooperation.
If your project specifications change, there will be fees associated with the change in billing. It is most appropriate for companies that are well-versed in the functionality of the final product.
The outsourcing company manages the development process, so the customer is not actively involved.
CAP Plan
The plan falls somewhere between a time and materials plan and a fixed-price plan.
Despite its flexibility, it does not allow for extreme fluctuations in cost as the cap (the upper limit) might kick in.
According to their requirements and needs, clients define an upper budget limit that cannot be exceeded.
It is possible to avoid uncontrollable costs by taking this approach. The program enables companies to control their spending and eliminate any excessive charges.
Monthly Flat Rate Plan
Here is another pricing plan which offers clients transparent cost estimates for software development services. The plan includes a fixed monthly fee for services of all levels of expertise and for all of the features.
Short-term collaborations will find the pricing model to be cost-effective as it is straightforward. Businesses with a tight budget should certainly look into this option.
Whatever the complexity or challenge of your project, you will still pay the agreed-upon fixed rate for your software engineers.
Optimize your .Net development cost with outsourcing
There are software companies that claim to be able to save you 60%, 70%, or even more of your .Net development costs. Your software can be developed more efficiently and at a reduced cost by using the right .NET development company. Is it possible to reduce costs in this way?
Some of the factors that can reduce the cost of .NET Development are listed below:
1. Labor cost: The labor costs in Ukraine and the US differ drastically because the economies of these two countries differ greatly. Compared to the U.S.the cost of labor in Ukraine is much lower. When you outsource .NET development services, you gain experience at a low cost.
2. Tools cost : Although open source software can be cheaper than .NET, the cost of tools such as Visual Studio, Visual Studio Code, Visual Studio for Mac, OmniSharp, etc. must be taken into considerations as these tools are needed to enhance functionality of .NET outsourcing companies. These companies can offer a combination of resources and tools without charging for them individually.
3. Costs of developing for the .NET platform: Are you able to create your own app if you're not technically proficient? A .NET skill will probably be a requirement for new hires. Outsourcing can eliminate extra costs associated with new hires.
Especially if you hire in-house resources, .NET development projects may require training specialists to comply with industry norms and policies. As a result, you'll incur less overhead costs for training with .NET Development Outsourcing teams.
4. Hourly fee: Developers with .NET expertise can be hired by the hour or by the month.
Without payment, the developer will not be able to work on your project. You may end up spending more with an internal .NET expert because you will be paying for idle time as well as working time.
5. Cost of employee benefits: All .NET employees must receive health insurance and pensions. This brings extra costs for your company. With .Net Development Outsourcing you will eliminate these costs.
Final Words
Understanding pricing models is just as important as understanding engagement models for establishing an effective collaboration with an outsourcing team of software developers.
You can choose the billing model that best suits your business needs and budget if you have a solid understanding of each.
We can determine the best billing model for your project after discussing the specifics of your project with one of our experts. Contact the Bits Orchestra team of professional Net. Developers and define your .Net development cost.
Author
Nataliya Oteir
Check other articles
_1.jpg?width=270&height=270&ext=.jpg&maxsidesize=338&resizemode=force)
The Strategic Guide to Inventory Management Software Development
Budgeting and Quote tools Automation solutions for your company
Inventory management: automation and best inventory practices
20+ reasons to move to Kentico MVC
What our clients say
Bits Orchestra team are outstanding developers. They listen carefully to our business needs and easily turns our business objectives into a well thought out and executed development effort. Roman is very bright and definitely the most capable developer that has worked on our site. He is not only a Kentico expert but has successfully tackled other complicated development assignments demonstrating expertise in both front and backend development. Roman takes initiative to suggest enhancements that make site maintenance easier while improving the customer experience. The team is very responsive to our work requests and has great follow up. They have also worked very business partners and this has reflected positively on our company. Roman is a true partner for us and a tremendous asset to our organization. We will continue to work with them and would highly recommend Roman and his team for your development needs. He and his team will exceed your expectations!
Alan Lehmann
President at In energy sector
What our clients say
The Bits Orchestra team does excellent work. They are always available and I appreciate our frequent calls and screen-shares together. Their dedication to the projects and knowledge of Kentico is outstanding. They truly care about the quality of their work, and became a part of our team easily!
Shena Lowe
Managing Partner at Consensus Interactive
What our clients say
We hired Roman for a Kentico analysis project and have been very satisfied. He is very skilled and professional. We are looking to hire him and his team again on future projects.
Sylvain Audet
CEO at MyDevPartner.com
What our clients say
Roman and team have taken over an existing Kentico EMS site for a large US Oil Company. So far, they have handled every single request that we have thrown at them and these were diverse, challenging, often bespoke, usually urgent and almost daily, over the last 11 months. Their work is of an extremely high quality, they are capable, quick and we have great confidence in the support that we are getting.
Jon Hollis
Head of Web Development at confidential
What our clients say
Bits Orchestra team was very helpful, they had a good understanding of the brief and deep knowledge of the system. They were always keen to provide advice and recommendations that benefit the project substantially.
Ramon Lapenta
Senior Front End Developer at Cyber-Duck Ltd