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Local Company, Freelancing, Outsourcing or the Hybrid Model. Which One is the Best Choice?

Very often we come across situations when we have more work than the bandwidth to complete it. Accepting work with the current strength could become chaotic for you and lead to stress in your company. Similarly, leaving good billable work isn’t the most prudent option available in such a competent market. This is a very common situation to be in (something that even we have suffered from). Let us try to share our experiences with you to take a more rational decision and come out a winner.

 

Local Company

Pros: Easier communication, similar time zones, culturally things are better and alignment with respect to expectations are easier.

Cons: This might end up costing you a lot and not turn out to be great business.

 

Freelancing

Pros: Inexpensive, a lot of choice, flexibility

Cons: Not the best for bigger jobs where a team effort is required, and choice (yes, we know we have added that in the Pro’s section too). Risk diversification is not optimal – you need to analyze the cost saving and the risk you are taking for it. More often than not, penny wise is pound foolish. Code quality might end up being compromised and there is no guarantee of proper licenses being used. Culture and time could be a problem especially if you are a stickler for details, which you should be.

 

Outsourcing 

Pros: Less expensive than hiring a local team, around the clock development, a team is involved, and you hire companies rather than individuals.

Cons: Culture is going to be an issue. Without a local representative it is going to be a nightmare making the other party understand your issues or specifications. Risk diversification issues and legal issues might arise. You may end up in a very tight spot because each country has their own laws and travelling might be required to a check on everything.

 

Hybrid Approach

Pros: Less expensive than hiring a local team. You have local representatives including the owner or owners, account managers, and usually some senior executives who are your points of contact. Legal issues are very clear and culture consistency remains.

Cons: It costs more than outsourcing. You need to ensure that representatives handling your account locally are competent and have a good track record and references in the industry.

If you look at the above graph, notice that the Quality between a Hybrid Model of Development and a Local Team are on par, but this would depend on the capability of both the companies. Some local companies may provide inferior quality to hybrid companies but the cost savings are close to 40 percent. In a world where margins are ever so tight, you start off with an edge. As the old saying goes “A penny saved is penny earned!”

In case you would like to understand the hybrid model of development in more detail, feel free to get in touch with us at hello@dignitas.digital.