Outsource Software
Offshore Outsourcing: Hourly Rate or Project Based?
When outsourcing software development, it is a common question for both vendor and supplier - do you charge/purchase by the hour or by the project? I suppose there are merits to both types of software development contracts.
In my experience, if you wish to procure offshore software development at an hourly rate, then I recommend oDesk. They have good hourly reporting tools. In addition, in order to build trust in the relationship, they will take random screenshots of the developer to verify they are working on software development and not padding hours.
If you want project based, go to rentacoder or scriptlance. I still find these sites a bit lacking in the usability and design perspective, but they get they job done. Do you know of a better site? There are few others listed in the Outsource Marketplace section of the Offshore software development review section of this site.
September 13th, 2006 at 10:04 am
Project based pricing [some version of firm-fixed price] requires experience on the part of the vendor, confidence on the part of the customer, a willingness from both parties to negotiate an exacting scope of work, and the business processes, project management procedures and collaboration tools required for both parties to track work against the scope. Perhaps you find the sites catering to full-project outsourcing to be lacking because the activity of creating, negotiating and managing a successfully outsourced project is simply too complex for simple text/graphic web-based software to handle.
Perhaps web technology is just suited to managing the suplemental staffing of a “code monkey” churning out a program module against a detailed specification including psuedo-code, with no room for the creativity normally associated with software development and problem solving.
September 13th, 2006 at 11:12 am
Todd,
Great topic - buyers who want to build remote teams need to think about whether to pay hourly or on a fixed bid basis.
(Disclosure - I work for oDesk)
Our customers have told us that the hourly model is best when:
* Your requirements are not set in stone, and may change over time
* You may want to retain the worker’s services on a long-term basis
* You may want the flexibility to end the project after only a few hours of work
A fixed-bid project model may be desirable if:
* Your requirements are extremely detailed AND set in stone
* Your project size is relatively small (less than a few weeks of work)
For more on the hourly vs fixed bid debate, check out a discussion in the oDesk Community, a discussion in a SitePoint forum, and a rant from the angryCoder.
-Jason Chicola
September 13th, 2006 at 11:24 am
Thanks Joseph and Jason, you bring up good points. Jason, thanks for the links to hourly vs. fixed bid debates in software development.
-Todd