QA cost model: in-house versus vendor
ChooseQAVendor framework v1.0. Sample with made-up example numbers. They are not market rates. Nothing you enter in the toolkit is sent anywhere.
Total cost of ownership
| Option | 12 months | 24 months |
|---|
| In-house team | 315,225 EUR | 572,325 EUR |
| Time and materials | 285,600 EUR | 544,200 EUR |
| Dedicated team | 271,200 EUR | 515,400 EUR |
| Fixed scope | 271,200 EUR | 515,400 EUR |
| Outcome-based | 247,200 EUR | 467,400 EUR |
Totals include onboarding, your own management time and the cost of exit, not just the vendor's fees. Compare options over the same period and the same scope.
In-house team
| Cost line | 12 months | 24 months |
|---|
| Salaries with employer on-costs | 225,000 EUR | 450,000 EUR |
| Recruitment, including replacements for attrition | 27,600 EUR | 31,200 EUR |
| Ramp-up (half productivity during ramp months) | 28,125 EUR | 28,125 EUR |
| Tools and licences | 6,000 EUR | 12,000 EUR |
| Equipment | 6,000 EUR | 6,000 EUR |
| Management time | 22,500 EUR | 45,000 EUR |
Time and materials
| Cost line | 12 months | 24 months |
|---|
| Vendor fees from the quote | 230,400 EUR | 460,800 EUR |
| Onboarding (your team's time and any setup fee) | 15,000 EUR | 15,000 EUR |
| Your management overhead | 25,200 EUR | 50,400 EUR |
| Tools you pay for to support the vendor | 3,000 EUR | 6,000 EUR |
| Exit and knowledge transfer (at the end of the period) | 12,000 EUR | 12,000 EUR |
Dedicated team
| Cost line | 12 months | 24 months |
|---|
| Vendor fees from the quote | 216,000 EUR | 432,000 EUR |
| Onboarding (your team's time and any setup fee) | 15,000 EUR | 15,000 EUR |
| Your management overhead | 25,200 EUR | 50,400 EUR |
| Tools you pay for to support the vendor | 3,000 EUR | 6,000 EUR |
| Exit and knowledge transfer (at the end of the period) | 12,000 EUR | 12,000 EUR |
Fixed scope
| Cost line | 12 months | 24 months |
|---|
| Vendor fees from the quote | 216,000 EUR | 432,000 EUR |
| Onboarding (your team's time and any setup fee) | 15,000 EUR | 15,000 EUR |
| Your management overhead | 25,200 EUR | 50,400 EUR |
| Tools you pay for to support the vendor | 3,000 EUR | 6,000 EUR |
| Exit and knowledge transfer (at the end of the period) | 12,000 EUR | 12,000 EUR |
Outcome-based
| Cost line | 12 months | 24 months |
|---|
| Vendor fees from the quote | 192,000 EUR | 384,000 EUR |
| Onboarding (your team's time and any setup fee) | 15,000 EUR | 15,000 EUR |
| Your management overhead | 25,200 EUR | 50,400 EUR |
| Tools you pay for to support the vendor | 3,000 EUR | 6,000 EUR |
| Exit and knowledge transfer (at the end of the period) | 12,000 EUR | 12,000 EUR |
Assumptions
- In-house: attrition creates replacement hires each year; ramp-up is costed as half productivity during the ramp months.
- Vendor: fees come from the vendor's quote; the model does not contain market rates.
- Exit cost is counted once, at the end of the period, so the comparison includes the cost of leaving.
- Fixed scope: price per release multiplied by releases per year. Change requests are not included; ask for their pricing.
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