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When we go for offshore software development, we come across several options to hire the vendor. Personally, I like hourly rate price option for outsourcing software in comparison to fixed price contract model. Because of its sharp edge over the other options, the practice of IT outsourcing on hourly rates basis is becoming more popular among the outsourcers. You too might be looking to outsource IT services on hourly basis to improve your profit ratio. But, I see that very few outsourcers are confident for judging the quoted hourly rates rightly. Why? Is it possible to select the best software hourly rate with the tendency of comparing "apples to oranges"? After short listing right vendors, judging the best hourly rate is another important and challenging part of IT outsourcing process. So, what should be the parameters to judge software hourly rate w/o compromising on quality? The following analysis of various parameters will help you to judge the best hourly rate among the available options.
First of all you should identify comparable deliverables. For example, it is unfair to compare a software hourly rate which comes complete with required infrastructure with a proposal that needs your involvement at various stages. For comparing the rates successfully, a precise analysis of deliverables like the basis of performance, response time and reliability etc is must. Justification of the hourly rates also depends upon the programming technique, developing process and software testing tools etc to be used by the vendor. Secondly, you should evaluate the cost of your professionals’ involvement in supporting the activities of the selected vendor.
More monitoring, quality check, training, follow-up like activities by your staff will cost you more. Location of the service provider also matters a lot. Indian and China are considered favorite outsourcing work destinations though some European countries are also gaining popularity among the outsourcers. Hourly rates of European bidders can't be compared with those of Asian bidders. Onsite service back up quality and expertise also make significant difference. So, it is must to compare the talent, qualification, experience, role and responsibility of the proposed staff to be associated with your project.
Thirdly, every outsourcing solution activity involves many hidden costs. Reporting pattern, risk management, data security and additional ‘free pack’ of allied services etc also affects the value of the hourly rates. You should also evaluate the capabilities of the selected vendor to match the changed requirements of the client. Some vendors submerge the additional cost of the renewed process of software development in the quoted rates, while some charge additional. So, the ‘additional cost’ clause of the agreement should be identical in all the proposals. To make the offshore software development decision further easy, first of all prepare a chart of parameters discussed above. Put the values of all the in-hand hourly rate proposals in the chart. You will get the answer- yourself. If you need more help to get and judge the best hourly rate proposal for outsourcing solutions, just visit http://www.outsourcing-partners.com/ that provides complete solutions to all your outsourcing needs.
