Types Of Models Offered By An Outsourcing Company

To stay competitive in the business scenario, you must be incredibly decisive and strategic. Outsourcing helps your organization to prosper in many ways. You can select an outsourcing model that best fits your circumstances. These outsourcing models are classified in three ways: pricing, relationship, and location. Outsourcing is a business practice in which services or job functions are hired out to a third party on a contract or ongoing basis.

Pricing Models

The Fixed Price (FP) model is a traditional and old outsourcing model. The service provider levies a standard charge on the host employer in this model. This charge is inclusive of the tools charges and the workspace charges. After the service provider completes the work, the host company disburses the payment. 

The Time & Materials (T&M) model consists of submitting bids on a specific project and furnishing a proposal based on the host company’s needs. It also states whether the operations would be completed in-house by the service provider or under the guidance of the host employer. In the current scenario, this is the preferred model for IT projects.

The Incentive-based model implies that the host company disburses an add-on above the previously agreed rate to the service provider. This add-on is because the service provider has exceeded the metrics and goals in the contract.

The Shared risk-reward model is identical to the incentive-based model. When the service provider reaches a particular milestone in the partnership, the host company disburses an additional bonus.

Relationship-based models

The Project-based model implies that the entire responsibility of the work is of the service provider. The host company provides a brief and project requirements to the service provider and the project owner for the entire project duration.

The Managed-team model implies that the service provider and the host company reach a consensus about sharing responsibilities and designating tasks for both. The host company controls both teams to confirm that the desired results are met.

The Staff Augmentation model implies that the service provider’s outsourcing team joins the in-house employees of the host company to handle internal programs. The host company controls the outsourcing projects from the beginning till the end. This model is a bit identical to onsite outsourcing.

Location-Based models

The Onsite Outsourcing model means that the service provider’s team reports to the host company’s office and works with the in-house employees. It accelerates learning about the host company’s systems and processes.

The Onshore Outsourcing model means that the host company outsources its functions to a service provider in the same state or nation as the host company.

The Nearshore Outsourcing model means that the host company outsources its function to a service provider in the neighboring nations of the host company’s nation.

The Offshore Outsourcing model means that the host company outsources its functions to nations far from its nation.

Pearl Lemon Outsourcing deals with several outsourcing services: business sales, personal assistants, marketing and public relations, and bookkeeping and accounting. While discussing your requirements with this outsourcing company in Swansea, you can negotiate and customize your model as per your choice.


Leila is a small business blogger with a focus on networking and networking events. With over 6 years of experience covering the small business world, Leila has a reputation for being a knowledgeable, approachable and networking-savvy blogger. She has a keen understanding of the importance of networking and the opportunities it can bring to small businesses, and is able to provide actionable advice and strategies for success. Leila has interviewed industry experts and covered major networking events such as the Small Business Expo and the National Small Business Association conference. She is also an active small business owner herself, which gives her a unique perspective on the challenges and opportunities facing small business owners in the networking sphere. Her blog is known for providing valuable insights and tips on how to effectively network and make connections to grow a small business.