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What Is a Dedicated Development Team?

It is an outsourced team of developers that work with a client on a long-term basis. This team of professionals is assembled for your specific business goals, shares a lot of similarities with your in-house teams, and, basically, becomes part of your company during your project’s implementation.

It is a big challenge to find a reliable dedicated development team to fulfill your business vision within a strict timeline and budget. Usually, mid-sized businesses and enterprises hire dedicated development teams to create new products or implement technical tasks in which they themselves lack experience. We at SPD Group have been helping companies by providing them with dedicated teams for more than 16 years, and continue to gain more experience in this area. If you are the CTO, CEO, or Chief of Innovations of a startup or product development company, you may find this article useful, as we share our thoughts on adding remote experts to your project. SPD Group has successfully adjusted to the demands of the COVID-19 restrictions and continues to deliver great software solutions to clients worldwide.

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When do you need help from dedicated software development teams?

Scenarios when dedicated teams might help

There are multiple scenarios when dedicated software development teams can be beneficial and capable of truly making a difference. The good news is that both small startups and well-established enterprises can find good use of a dedicated team. Here are some scenarios for you to consider that might resonate with your situation.

A startup that requires quick product development from scratch

If you are creating your first MVP and looking for proficient experts, the Dedicated Team model might save the day. With a dedicated team, you will not have to spend any additional money on recruitment activities, renting an office, or buying additional equipment like with your in-house software development department. The bottom line is that local talent is more expensive, and you could also waste a lot of valuable time trying to find the experts you need locally. If you choose the Dedicated Team approach, you will only pay for what you need, which is perfect for a startup environment.

A new tech company in need of additional expertise

Here, the Dedicated Team model can offer a quick extension of your development capabilities with experts, which will offer a young tech company an opportunity to get clients and start operating. Just like with startups, you will pay for your dedicated team only when you use its services, and be spared any recruitment or infrastructure-related expenses.

A tech company working on a big project

Plans may change on the fly, which is a common thing for enterprises that create products with the help of multiple tech companies. If you represent a tech company and enterprise, you create a product that needs more workforce, the Dedicated Team model can t be very useful. It can help you earn more and get better contracts from your software provider. The speed in this scenario is crucial, and adding a dedicated team of engineers is a good idea.

An organization in need of tapping into a new technology

Any company can be in a situation when the existing tech expertise does not match their business needs anymore, or when they want to enter new industries. Adding a dedicated team to the mix will solve this problem and add just as many tech experts in the new field, as required. This approach will provide you with access to the global talent pool, so you will be able to assemble a dedicated team with those engineers, who are not available locally.

This is especially important for cutting-edge technologies like Artificial Intelligence and Machine Learning because the experts one needs might simply not be available anywhere near your region, and a dedicated team is the only way to fix the situation.

In all the above scenarios, dedicated software development can bring tangible benefits to organizations. It will be a good idea to consult an experienced IT provider to find out how exactly dedicated software development can help in your specific situation because each case is unique and more effective alternatives may appear after some analysis.

What are the options for forming a Software Development team?

We live in unprecedented times when the world is trying to adapt to the new normal. Many businesses had experienced a screeching halt in their growth as a result of the COVID-19 pandemic, some have incurred significant financial losses, and some have closed their operations. It is safe to say that all organizations have suffered, and we are still not fully aware of the extent of these events to the global economy. Businesses are forced to work remotely and outsource their jobs to survive. According to the Capital Counselor, the IT industry is a leader in outsourcing and accounts for some 50% of the global outsourcing market.

Global IT Outsourcing Market Statistics

Technavio predicts that in the next 4 years the IT outsourcing market will be growing at a 5% rate and reach almost $500B. What does that mean for your business? How to hire dedicated development team for your project? What cooperation model will help you achieve your goals? This article will provide answers to these questions and more, but let’s start with the basics.

What is the structure of a software development team?

Here is how the typical team might look:

Typical software development team structure

Key software development team roles include:

  • The Project Manager (PM) is in charge of planning and execution, overseeing all processes, delegating tasks among the software developers in a team, and communicating with the client.
  • Business Analysts (BA) are responsible for setting goals, analyzing and documenting core processes, and making sure that everything is aimed at achieving the set business goals. In some of SPD Group’s projects, our partners delegate the right to be Product Owners to our dedicated development team our Business Analysts. This allows our partners to delegate the creation of project requirements for their solutions to our dedicated team. Therefore, they set only high-level business goals.
  • Designers are in charge of how the product will look and how users will interact with it.
  • Software developers do the actual heavy lifting by writing the code. Front-end engineers are focused on the customer-facing part of the product, while back-end engineers take care of the elements that users don’t see.
  • Quality Assurance Engineers (QA) are testing the product to make sure it meets set requirements.

Other important roles that could be required in a project:

  • Tech Lead is often the most skilled among the software engineers in the development team. They are responsible for the technical decision-making on the part of the team.
  • The Team Lead is a technical expert too, but with a focus on the management process.
  • Solution Architect creates architecture solutions for all the teams, involved in implementing the project. This expert oversees the entire development process.

Local product development teams

Having your entire team in-house is a great option. There is a great chance that most of your team members will speak the same language and have similar backgrounds and beliefs. This cultural fit is definitely a plus for a project. It will help newcomers integrate faster into your processes.

The second main advantage is that having the entire team available on-site helps connect everyone better, reduce misunderstandings, and solve any possible conflicts more quickly, or even prevent them. All the changes and adjustments to the projects can be made faster because everyone is not only in the same time zone but also often in the same office.

Among the drawbacks is the fact that the cost of an in-house team is much higher than that of cooperation with an outsourcing company: you don’t only need to pay salaries, but your expenses also include overhead salaries, benefits, training costs, and more.

The IT industry is evolving very rapidly. The scope of your project may change in response to the market demand, but not all of your current employees may be ready, willing, or able to upgrade their skill sets quickly or change their professional focus. The solution would be to hire a development team of more proficient local talent with the required skills, but unfortunately, they can cost more. If you have budget constraints, this option can be practicable only to a certain extent. Also, keep in mind that there is a tendency in the US and Europe for top experts to change companies due to the high demand and better wages. So, you will always be in danger of losing a key team member during a crucial stage of your project’s implementation. Who needs that to happen? Additionally, it may be hard to keep your team up-to-date with the required people without having a big pool of experts in-house.

There is an option of hiring software developers as separate freelance experts, but you will still be faced with the hiring hassle and a limited pool of available experts. The possibility of building long-term relationships will be uncertain. With freelance, you will usually receive just an implementer team and not active participants in your business processes.

Read also: Hiring Java Software Developers in 2021

Outsource development teams

The two biggest drawbacks of outsourcing are the lack of control and concerns about communication. Yes, it is harder to keep track of the progress and make quick decisions when experts are not in the same building, but the COVID-19 pandemic has made companies switch to remote work anyway. Fortunately, with a reliable software development outsourcing partner and a clear understanding of the business objectives, your company can be even more successful and turn this obstacle into an opportunity by using a proficient dedicated team of software developers.

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What are the benefits of dedicated development teams?

Saving costs

According to a study by Deloitte, 59% of companies consider outsourcing as an effective cost-cutting tool. Indeed, a company from the United States can cut its costs by around 50% by hiring a dedicated team.

Access to the expertise

Sometimes the required software development experts are just impossible to find locally, or you have to pay them a salary way beyond your limit. If you choose to hire a dedicated development team that operates remotely as an option to expand your existing team, you will have access to the best experts from all over the world.

Greater flexibility

You can change the team composition according to the current business goals as quickly as required.

Fast scaling

If you need to grow fast, outsourcing is a great option too. Hire a dedicated team with as many talents as you need immediately to complete your objectives and fulfill the business vision!

“Do what you do best and outsource the rest!”
— Peter Drucker

What are the main types of engagement models for hiring dedicated development teams?

While the names may change, and every IT company has its own way of cooperation with its clients, SPD Group offers three main models to cover the most popular scenarios. If you want to learn more about the existing IT engagement models, read this article.

Three main engagement models

Full-Cycle, Project-Based Outsourcing

This is a perfect choice if you want to have full control over the entire process with maximum predictability. Under the scenario where you know exactly what you want from a project, you can visualize the final product, and estimate the deadlines and the budget, the Full-Cycle, Project-Based Outsourcing is the way to go. The outsourcing company will be a partner from the very beginning to the release, maintenance, and ongoing improvement stages. This is how the stages of this model look:

  • Defining business objectives
  • Project Evaluation Workshop and Proof of Concept (PoC) are needed in some cases
  • Research and design
  • Development
  • Post-launch maintenance and support

Our team will be your software solution development partner from the product inception throughout the development and maintenance phases, with ongoing development, feature improvement, and performance optimization after the release. As a result of our involvement, you will get a fully functional product on schedule, with detailed reports and complete transparency in each product development process stage.

Team Extension (Staff Augmentation)

This model fits when you know your business goals and how to achieve them, and don’t need to hire a development team to work on your project because you already have specialists. All you are lacking is additional experts for the job. The Team Extension (Staff Augmentation) model is the option for Chief Technological Officers that are looking for a team of experts of a specific type for a specific period of time. For example, it could be a web development team that needs to be augmented with web/mobile software developers and QA specialists to build a sub-project. You can also hire a development team that will include a Project Manager, Business Analyst, or Team Lead, but you will maintain control over the project’s overall strategy. The time and cost savings are the main reasons to choose this model over the hassle of hiring offshore software developers as short-term employees locally.

Managed Team (Dedicated Team)

In times when the final goal is unclear, but you have a general direction this model might be the most suitable one. It is also a great fit when you already have an in-house or outsourced team of software engineers implementing a project, but you need a workforce boost. Sometimes, your project changes dramatically during one of the iterations, and you don’t have the luxury to hire a development team locally. The Managed Team (Dedicated Team) allows your in-house team to join forces with a remote team of experts for the best results. In this article, we will focus on this model and provide a detailed explanation of its value for businesses.

The benefits of the Dedicated Development Team Model

9 benefits of dedicated development teams

More delivery with the same budget

Previously it was mentioned that outsourcing is popular as a cost-cutting measure. With a dedicated team model, we can consider your project to be cost-efficient thanks to hiring software developers that are more proficient and capable of producing better results for the same money.

Full control of the project’s delivery with daily updates

You will receive regular updates during each step in the development. You can share the decision-making or delegate some decisions to the dedicated software teams.

Agile development team

The main difference between the traditional and Agile approaches lies in the collaboration between the experts. The chances are that the Dedicated Software Development Team will adhere to the Agile standards, so here is a quick comparison:

Direct comparison of traditional and Agile teams

The Agile approach ensures the flexibility of this model, making it possible to adjust the conditions as you need to do so.

Predictable costs

You will be aware in advance what the hourly rate of each expert is. This will help you plan the budget more precisely for the entire duration of the project.

No hiring hustle and paycheck pain

Software development companies have their own recruiters and HR experts. You don’t have to worry about any HR-related activities, paying only the hourly rates.

Fast and easy start

All you need is to know what you are lacking for the project, how the project scope has changed, and have the requirements have changed. Then you can go directly to the interviews and find suitable dedicated software developers.

Quick time-to-market

When the time to market is crucial, you can adjust your strategy accordingly. You can hire the software developers that suit your purposes best right from the start to achieve this goal. Dedicated Development Teams are great for startups looking to launch their products sooner.

24/7 Office: Time differences as a benefit

Different time zones are not always a bad thing, because you can plan the operations in such a way that your operations will continue 24 hours a day. Hire dedicated developers even in the most inconvenient time zones and you will benefit in other ways.

The ability to focus on your business operations

Hiring a dedicated team, without the recruitment hassle and with the option of shared decision-making will free up time and energy for running your core business operations. It will allow you to come up with more plans for your project and improve your overall vision for the project.

Dedicated Development Team structure

The founder of Amazon, Jeff Bezos, coined the term “two-pizza team”, and it came from the phrase “If you can’t feed a team with two pizzas, it’s too large”. The same holds true when you hire a development team. As mentioned previously, according to the Agile approach, 6-8 experts in dedicated development teams work great. This team can include:

Basic team composition for dedicated development teams

How do you build a Dedicated Development Team?

How to create a dedicated development team

Defining the requirements

Contact your outsourcing partner and present your business idea to them to receive the project requirements and tech stack for the solution. A detailed requirements document along with general information about your company will help the IT provider find dedicated software developers that are a good fit both technically and culturally.

Interviews with experts

Dedicated teams are usually formed from scratch in accordance with the project requirements. You may be lucky enough to get software developers that worked together on a similar project, but that’s not the case most of the time. In case you already have a trusted software development partner, you can let them hire a development team for the project. If you want to get more involved in the hiring process, you always have an option to conduct interviews with your candidates. You will get multiple rounds of interviews during the hiring process. All the candidates are approved first by your IT provider following technical and HR interviews with them, aimed to confirm the candidate has the required skills and motivation to take on the project. Only after screening by the vendor, will you receive a list of candidates that can be a good fit.

The hiring process is also an excellent opportunity to recheck whether you’ve partnered with the right outsourcing company. You can evaluate how they’ve managed to meet your expectations and requirements, what style they use for internal communication, and what company culture they have overall. These details will help you make a more informed decision. You will be able to evaluate the potential for future cooperation. Don’t pay before you hire the required software developers, and insist on signing NDAs before the interviews are held.

Launching a dedicated team

If interviews go well, you will already have a group of people who are able to get the job done. The launch will be fast and easy and it will let you focus on other goals.

Managing a dedicated team and receiving updates

You can pick your own style of management: some will choose daily updates with more control, while others will give more free hand to the Project Managers and software developers. Receive as many updates, as you need to follow your business goals.

Release and contract renewal

After the experts complete their part of the job, you can draw some conclusions on how well this model has performed in relation to your project. Hopefully, with the next contract, you will trust more responsibility to the remote experts, increase the scope of your projects and make more money as a result.

Things to know before hiring a dedicated team

What do you need to know before hiring a dedicated development team?

Understand the software development processes

You must be fully aware of all the small details in the software development process. Understand clearly the responsibilities of your IT provider and your own ones in order to avoid any conflicts or misunderstandings on a high level.

Learn what your experts can do

During the interviews and actual work on the project, find out about the skills of your remote experts. Just like your in-house team, they could be useful in other projects. Knowing more about your team members’ skills and experience can save you time in the future!

Always sign an NDA

The protection of intellectual property and confidential information is crucial in 2021. Trust and security are two significant concerns when it deals with outsourcing partnerships. To make sure this wouldn’t be a problem, review your IT provider’s intellectual property policies and NDAs before the kick-off of the development process. Keep in mind, that when you hire software developers, there is an option to sign a personal NDA with each of them.

Get a detailed and transparent contract

The contract you sign must have a clear description of:

  • The development rates with detailed breakdowns depending on the required expertise
  • Possible discounts
  • Payment and invoicing protocols
  • Credit periods and limits
  • Warranty conditions and periods

Read also: How to Set Up Your Own Offshore Development Center in 2022

How does the Dedicated Software Development Team Model differ from the Fixed Price Model and the Time and Material Model?

These three models are often compared when companies consider hiring a provider of software development services, but what are the key differences that may or may not work for your particular project? What makes a dedicated team model stand out from the other available options?

 Dedicated software development team modelFixed price modelTime and material model
Predictability of the budgetYesYesNo
FlexibilityYesNoYes
Fast startYesNoYes
Defined timelinesNoYesNo
Iterative software developmentYesNoYes
Fast time-to-marketYesNoYes
Payment modelPrice is determined per resource and payments made monthlyOverall price is determined from the start and payments made according to schedulePrice is determined per resource and payments are made monthly
Client involvementHighest when neededMinimalRegular

Where to hire dedicated software development teams?

So, you decided that the Dedicated Team approach is right for you. But what regions should you focus on in order to hire the dedicated team members that your project requires? Let’s take a quick look at the most popular outsourcing destinations suitable for this purpose.

There are seven popular regions that are well-known as places to hire programmers. Those regions are North America, South America, Western Europe, Central Europe, Asia, India, and Australia. These geographies are very different in terms of price and qualifications. For example, in the US you can find highly skilled experts to join your dedicated team among the more than 4 million software developers, but the price tag will be the highest. Regions like Asia and India will offer less expensive experts for dedicated software development teams, but there are a lot of beginner-level programmers, so there is a risk of compromising on quality.

So, it is important to strike a balance here. Central Europe might be the middle ground in terms of the maximum cost-efficiency as far as the Dedicated Team model is concerned. Ukraine and Poland alone have over 400,000 proficient tech experts combined, which is more than enough to find exactly who you need for your dedicated team. The hourly rates of software engineers in Ukraine are almost twice lower than those in the US, but the high level of skills remains.

The platforms to hire dedicated software development teams

In the variety of places where you can find experts for your dedicated team, few platforms truly stand out. By using the following B2B directories, you can find a reliable IT vendor with a proven track record and an experience in the industries you operate in:

Always read carefully through client reviews and feedback to get a deeper understanding of how a specific vendor operates and what roadblocks you may hit in your potential cooperation.

Our expertise in remote development

SPD Group is an innovative technology partner for organizations that offer Business Analysis, IT consulting, and software product development services. Since 2006 we have helped clients in Finance, Fintech, E-Commerce, Tourism, and other industries build software products of their dreams. SPD Group’s expertise spans from the initial research and development and providing popular services like Java development to the usage of bleeding-edge technologies like Artificial Intelligence, Machine Learning, and Big Data.

SPD Group takes pride in being a trusted development partner, not just an outsourcing service provider. We are focused on building long-lasting relationships and not any short-term gains. Typically, we take ownership of the client project and grow together with our partners.

In many instances, our team members have been fully integrated into the team of our partner and became permanent members of the project. In June 2008, we created a partnership with a startup called NimbleCommerce. In 2016, this startup was acquired by the BlackHawk Network. However, SPD Group’s team continued working on the project. It consisted of a total of around 80 permanent team members who performed business processes and assets consolidation, data transformation/migration, and post-transition support for the new owner of the project – an industry-leading company in financial services, and prepaid payments, and gift cards. You can read a detailed study here.

In one of our more recent projects, we partnered up with Poynt, a revolutionary open commerce platform and the inventor of the Smart Terminal. The partnership commenced in early 2019. SPD Group’s experts were engaged based on the dedicated development team model and provided software development, software support, maintenance, and brand-new features development and improvement services. On December 15, 2020, it was announced that GoDaddy signed a deal to acquire Poynt for $365 million. SPD Group’s project team which consisted of 25 experts continued to work for Poynt under the new ownership.

One of the tools, that boosts the performance of our dedicated teams is Metucat, an Integrated Framework that allows distributed teams to work independently on different parts of the product. This framework uses visual metadata and helps to develop, maintain, and evolve data-centric applications. Metucat suits companies of any size and can be leveraged by system architects, software developers, and business analysts. This framework was actively used while developing software for Poynt, and it helped to save up to 50% of the time on planning, analysis, and design.

The average duration of our partnerships is 5 years. Currently, we have 500+ certified and award-winning experts involved in nearly 20 projects all over the world. Our partners are always able to communicate not only with our Management but also with our software developers to get detailed updates on the progress of their projects.

Conclusion

Whether you already have a team of in-house software developers, or you don’t have any at all, the Dedicated Development Team model is a great choice for building your software product. If you are tight on budget, not sure about the technical requirements, but still want to start implementing a long-term project give this model a try! With a trusted outsourcing company you will receive a partner that shares your goals and vision and can help you find the right business direction.

Summary

What are the Pros & Cons of Dedicated Development Teams?

Dedicated development teams can help you save money and get more expertise and value for the same investment. They give you access to a global pool of experts and the flexibility to change the project's direction or scope without any recruitment hassle. On the downside, there is a risk of lower software quality, security issues, a lack of communication, and a lack of control over the development process. However, with the right software development partner, the pros clearly outweigh the cons.

What are the options for outsource development?

You can hire freelance experts, but you face the same or greater risks as under an outsourcing arrangement. It is better to partner with a software outsourcing provider using one of the common engagement models including the Managed Product Model, Managed Team Model, or Dedicated Development Team Model.

When should I hire a dedicated development team?

It is perfect for situations where you don’t have a clear vision of the final result of the project. In those cases where the scope, budget, and timeline may change it is a way to go. For some projects, like, for example. In Machine Learning-related projects, the actual requirements become clear only after some time and effort are spent on the project discovery.

How do I hire a dedicated development team?

You need to find a reliable software development company that can become your partner. Present your business idea to the partner, and receive the requirements and tech stack for the solution. After that, your partner will find software developers that are suitable for the job. You will be able to conduct any additional interviews with them if you see it fit to do so.

How much does it cost to hire a dedicated development team?

It depends on the particular case, the number of experts in your team, and the team’s composition. You can get rough estimates for your project by contacting a software development partner that will be able to evaluate your unique situation.

Further Reading

  1. Embracing Agile – https://hbr.org/2016/05/embracing-agile
  2. The Pros and Cons of IT Outsourcing – https://www.journalofaccountancy.com/issues/1998/jun/antonuci.html

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