The most commen way to start with outsourcing is based on projects. These are mostly fixed-price.

These are mostly ‘fixed-price’, and if the requirements are not defined as yet, it can be based on ‘time and material’ as well. The great advantage of the project approach is that one has full flexibility in terms of capacity and technology. If one does not have projects, one does not have any costs. Teamsize and expertise can be adjusted as suits the project.

The project approach is suitable for software projects that can be clearly defined. In the project approach, resources are allocated for the duration of the project. After the termination of the project, the same resource would work for another project for another client. So knowledge retention would not be continuous. Normally specifications are well defined for this approach or if they are not well defined, India plays an important role in the initial requirements phase. After intensive interaction in the requirements phase to determine the scope of the project, a fixed estimate would be given.