Today, the future of outsourcing looks brighter than ever. According to Outsourcing Insight, 31.5% of IT services in 2024 are being outsourced, while Grand View Research predicts that the global business process outsourcing market is expected to reach $525 billion by 2030.
As we cover the ins and outs of outsourcing in our articles, it’s time to talk about one of the most popular requests of businesses – how to hire a dedicated development team. We, at SPD Technology, have been helping companies build dedicated teams for more than 18 years and continue to gain more experience in this area. Our biggest clients, including Poynt, Blackhawk Network, and PitchBook are already fully benefiting from this model, so the chances are dedicated development teams will be a great fit for your organization as well.
What Is a Dedicated Development Team?
A dedicated development team is an outsourced team of tech specialists who work with a client on a long-term basis. This team of professionals is assembled for your specific business needs, shares a lot of similarities with your in-house teams, and is fully committed to your project during its development and implementation.
In 2024, dedicated development team services remain crucial for businesses as they provide cost-effective solutions, allowing companies to leverage specialized skills and resources without the burden of maintaining in-house operations. The globalized landscape fosters access to a diverse talent pool, enabling organizations to tap into expertise from various regions and time zones, ultimately promoting innovation and efficiency.
The dedicated development team model also grants businesses the flexibility to adapt to rapidly changing market demands, fostering agility and scalability in an ever-evolving economic environment, so it makes sense to consider it for organizations of any size. At the same time, it is a big challenge to build a team to fulfill your business vision within a strict timeline and budget. Usually, mid-sized businesses and enterprises hire a dedicated software development team to create new products or implement technical tasks in which they themselves lack experience.
When Do You Need a Dedicated Development Team?
There are multiple cases when custom software development teams can be beneficial and capable of truly making a difference. The good news is that both 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 in Need for Rapid Product Development
The necessity for rapid development is often crucial for startups to gain a competitive edge and meet market demands swiftly. The dedicated development team model provides them with immediate access to the required tech talent pool, minimizing team hiring delays. In such a case, opting for a dedicated development team promises a focused, cohesive, and collaborative effort.
If you are creating your first MVP and looking for proficient experts, the Dedicated Team model could save the day. For example, in one of our cases, we provided an 8+ experts team for a North American eLearning startup, and successfully delivered a product with a 30,000+ customer base, proving the effectiveness of dedicated teams for startups.
Highlights Client Our client is a North American eLearning startup, founded by a group of seasoned technologists. They have…
Explore CaseA Tech Company Working on a Big Project
Enterprises often face intricate challenges when developing software products, including the need for robust, scalable solutions within stringent timelines. These solutions, in turn, should be aligned with the company’s specific industry standards, compliance requirements, and internal protocols. Hiring a dedicated development team addresses this by allowing enterprises to handpick professionals with domain expertise and a deep understanding of industry-specific regulations.
Just like, we helped a well-established provider of business funding and real-time financing services to build a high-scale SMB funding platform, assembling a powerful team of 13+ vetted Fintech professionals. As a result, we launched the end-to-end solution in just 18 months, enabling the client entering new business niches.
An Organization in Need of Tapping Into a New Technology
Any company can be in a situation when the changing business needs go beyond the tech expertise currently available, for example, when a company aims at entering new niches with its specific requirements and regulations. In this case, hiring a dedicated development team will allow your business to bridge the tech skill gap, access industry-specific expertise, and make the best hiring choice within the global tech talent pool. Tapping into new technologies and hiring custom AI solutions development specialists, for example, becomes possible following a dedicated development team model.
As for our practical experience, our 8+ dedicated team of experts proficient in modern tools and frameworks completely transformed a legacy notary service into a full-blown cutting-edge Legal Tech solution for an American client. Our quick formation of an efficient specialized team solved critical tech challenges for our client in the shortest time possible, securing the success of a product.
Oleksandr Boyko
Delivery Director at SPD Technology
“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.”
A New Tech Company in Need of Additional Expertise
In this case, the Dedicated Team approach can offer a quick boost of your development capabilities with more experts, which will offer a young tech company an opportunity to get clients and start operating. Just like with startups, you will be able to scale your team up and down, paying for the actually used services and avoiding any recruitment or infrastructure-related expenses.
What Are the Benefits of Hiring a Dedicated Software Development Team?
Let’s review the most common reasons why it makes sense to hire a dedicated development team for your organization.
Cost-Efficiency
The tangible opportunity to save operational costs is one of the main reasons why major companies outsource some of their tasks. A dedicated development team approach can significantly contribute to cost optimization for organizations in several ways, including:
- Offering predictable costs, as you will be aware in advance of what the hourly rate of each expert is. This will help you plan the budget more precisely for the entire duration of the project.
- Providing more effective resource allocation, ensuring that skilled professionals are fully engaged on relevant projects. This helps minimize downtime and idle periods, maximizing the value extracted from each team member.
- Since dedicated teams can be easily scaled up or down based on project requirements, you will be able to adapt quickly to changing needs without the long-term commitments and costs associated with hiring and training full-time employees.
Expertise and Specialization
Leveraging a dedicated development team often means tapping into a diverse talent pool from various geographic locations. This ensures that your development team is well-equipped to handle complex tasks and projects that may require expertise not readily available in-house, or even in your region.
Additionally, dedicated development teams typically adapt to the latest technology trends. This flexibility will enable you to incorporate the latest technologies into your projects without extensive internal retraining.
Adaptability to Change
You can change the team composition, size, or specialization under your current business goals as quickly, as required. This will allow your organization to quickly adjust development priorities, incorporate new features, or address emerging market trends without the constraints of an in-house team’s fixed structure. Your company will always have the right experts to navigate diverse markets and regulatory environments.
Engagement and Commitment
In a dedicated team approach, there is a shared sense of accountability for project success, unlike some of the other models. This shared responsibility among in-house and outsourced developers encourages team members to be more engaged and committed, knowing that their contributions directly impact the project’s outcomes, as they work towards common milestones.
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. Handling payroll, benefits, and other administrative tasks for in-house employees can be time-consuming and resource-intensive. Outsourcing a dedicated team will alleviate the administrative burden.
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 Software 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 an uninterrupted way. Instead of being a communication and collaboration issue, it presents a strategic advantage, enabling businesses to operate 24/7 and ensuring continuous progress on projects. Industries that demand uninterrupted operations, such as global customer support services, e-commerce platforms, and financial institutions, can greatly benefit from such an opportunity.
Learn more about the benefits and challenges of running a distributed software project across locations and time zones!
Core Operations Focus
Hiring a dedicated team, without the recruitment hassle and with the option of shared decision-making will free up time and resources 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 Team vs Augmented Team vs Offshore Development Center
While hiring a dedicated development team is a beneficial tactic, it’s not the only hiring strategy that you consider for your project development. Let’s compare it with other , no less effective approaches, such as augmenting your existing team and setting up an Offshore Development Center.
Speaking of IT staff augmentation, it’s logical to assume that this approach suits companies that already have an either in-house or remote team and need to augment it with additional specialists. Such a necessity typically arises when the project faces an increasing workload or time pressure, or requires specific technical skills that may not be available locally. Compared to a dedicated team, the main benefit of staff augmentation is retaining full control over the project course, since the customer manages an expanded team in the way they consider reasonable. The time and cost savings are other reasons to choose this model over the hassle of hiring developers as short-term employees locally. Usually, the companies extend their team with 5-10 employees.
In case you need a team of 40+ experts, you may consider opening an Offshore Development Center (ODC). We have a detailed article to provide you with all the information about this model.
An Offshore Development Center, in turn, is reasonable to choose for the businesses planning to establish a long-term presence in a specific offshore location. This model makes sense when the company aims for a continuous and large-scale development process, and that’s why it requires a separate facility and a significantly larger team compared to augmented or dedicated one. In the case of setting up an ODC, an offshore development team is hired and fully managed by the company itself.
Dedicated Team vs Fixed Price vs Time & Material Contract
After we have clarified the differences between a dedicated team, augmented team and ODC as tech talent hiring strategies, let’s draw a line between a dedicated team and other engagement models you can choose from when partnering with a software development outsourcing vendor.
To put it simply, an engagement model is a framework that defines the terms, conditions, and collaboration structures between a client and an outsourcing partner. The Fixed Price and Time & Material Contract are among the most common engagement models in the IT industry. Let’s review how they compare with the Dedicated Team approach.
How Do You Build a Dedicated Development Team?
Now, let’s discover how you can build a dedicated development team step-by-step.
Define Project Objectives
Get started by aligning the project objectives with the broader business goals. Identify how the development team’s work will contribute to the overall success of the business. Next, clearly outline the tangible results or deliverables expected from the dedicated development team. This could include software prototypes, specific features, or a fully developed product within a defined timeline.
Keep in mind that you should clearly articulate the project’s scope, detailing the functionalities and features to be developed, as well as establishing measurable goals and success criteria. For example, if the project involves developing a mobile application, a measurable goal could be achieving a certain number of downloads within a specified time frame.
Identify Skill Requirements
Identify the specific technologies, programming languages, frameworks, and tools that are essential for the project’s success. Consider both current and emerging technologies that may be relevant, and also make sure that the selected technologies are compatible with the organization’s existing infrastructure and systems.
If the project operates within a specific industry or domain, assess the domain knowledge required for success. Understanding the intricacies of the domain significantly enhances the team’s ability to deliver tailored solutions. We, at SPD Technology, for example, can build dedicated teams skilled in payment solutions development, including but not limited to payment gateways, Point-of-Sale systems, billing software, money transfer apps and much more. Our expertise also extends to legal technology solutions development and building eCommerce platforms.
Determine Team Structure
Define the structure of the dedicated team, including roles such as developers, Quality Assurance engineers, project managers, and any other necessary positions based on the project scope and your budget. Clearly outline the responsibilities associated with each role, ensuring that team members have well-defined tasks. Before you hire your first tech team, let’s discover how the dedicated project team structure might look.
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 analyzing and documenting the client company’s business processes, as well as collecting and refining the requirements for the solution to be developed. In some of SPD Technology’s projects, our clients delegate the task of creating project requirements to our Business Analysts. Therefore, the client sets 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 inner parts of the software system
- Quality Assurance Engineers (QA) test the product to make sure there are no security gaps, technical bugs and user experience glitches.
Other important roles that could be required in a project include:
- The 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 the architecture solutions for all the teams involved in implementing the project. This expert also oversees the entirety of the development process.
Not sure how to manage a dedicated team effectively?
Our recent article has 10 time-tested strategies to reduce management overhead and improve efficiency!
Assess Dedicated Development Teams Providers
Review the outsourcing vendors’ portfolios and case studies. Look for projects similar in domain, scope, and complexity to yours. Request and contact references from previous clients. Inquire about their experiences working with the provider, the quality of deliverables, and the provider’s ability to meet deadlines.
Choose a Provider and Sign an NDA
When you find the perfect provider, don’t forget to sign an NDA before any development-related activities start, to ensure that your information and intellectual property will be protected.
Schedule a Project Kickoff Meeting
At the project kickoff meeting, your provider should introduce key team members, discuss project goals, and expectations, as well as establish a clear understanding of the project’s scope and your business direction to make sure everyone is on the same page.
Hiring and Onboarding
While the provider should suggest the best-fit candidates to become a part of a dedicated team, you can interview the candidates too. The necessity for you to interview candidates depends on the particular situation. If you have the technical knowledge, it can be a big plus in ensuring that the right candidates will join your project.
Communication Channels Setup
Next, you will have to establish the communication channels with your dedicated team provider. This may include:
- Defining communication protocols that outline expectations, preferred channels, and response times.
- Leveraging collaboration tools to facilitate seamless communication. This includes instant messaging platforms, video conferencing tools, and project management software.
- Scheduling regular video meetings for team updates, project planning, and retrospectives.
Project Start
As every aspect is settled, you may now focus on your core business objectives and take action or adjust the development direction when necessary. The first iterations of the project should give you an idea of what changes are required.
Things to Pay Attention to Before Hiring a Dedicated Team
Before you start building your first dedicated team, make sure you have formalized your partnership with the vendor through Service Level and Non-Disclosure Agreements signing.
Service-Level Agreement
A Service Level Agreement (SLA) is a formalized contract that outlines the agreed-upon terms, expectations, and responsibilities between a service provider and a client. It serves as a crucial document in the outsourcing industry, establishing the parameters of service delivery. It clarifies what services are planned to be delivered to the client, including performance benchmarks, response times, and actual deliverables. Make sure to read it carefully, paying special attention to the next points:
- Scope of services
- Performance metrics
- Termination clauses
- Data security and privacy
- Intellectual property rights
- Service availability and downtime
- Dispute resolution mechanisms
- Service exclusions
- Exit strategy.
Non-Disclosure Agreement
The protection of intellectual property and confidential information is crucial. 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.
Core elements typically included in NDA are:
- Parties Involved
- Definition of Confidential Information
- Purpose of Disclosure
- Duration of Confidentiality
- Obligations of the Receiving Party
- Permitted Disclosures
- Exclusions from Confidentiality
- Return or Destruction of Information
- Legal Remedies for Breach
- Governing Law and Jurisdiction.
Where to Hire a Dedicated Development Team?
One of the main advantages of building your project with a dedicated development team is that it allows you to hire the best tech specialists across the globe. Still, each of the destinations has its specifics, including but not limited to the size of the tech talent pool, technical and English language-proficiency, cost to hire software developers, as well as business and political environments. Taking these factors into account, the US-based companies consider the next geographies to hire a dedicated team.
- Latin America. Many American companies choose to hire software developers in the LATAM region because of the geographical proximity, convenient time zone overlap and large talent pool. Brazil only has half million software developers, representing the largest tech talent pool in Latin America.
- Western Europe. Western Europe, especially Portugal which emerges as one of the most promising tech hubs in this region, is also an attractive discrimination for hiring a dedicated tech team. Western Europe boasts a highly skilled and educated workforce with a strong focus on quality, while shared cultural values and business practices enhance the collaboration between tech vendors from this location and American-based companies. At the same time, higher living standards lead to elevated labor costs compared to outsourcing destinations in other regions.
- Eastern Europe. The Eastern European part, in turn, represents the largest technical hub and tech talent pool on the European continent. There are 1,3 million software programmers in this part of the world. The majority of them have higher technical education, high English proficiency level, and practical experience in working with American projects. The cost to hire tech professionals in this location is especially competitive compared to Western Europe.
- Asia. Usually, companies that prioritize hiring at the most affordable rate and keep their operations running 24/7 opt for hiring Asian developers. The Asian region has a vast pool of skilled developers and IT professionals, however, you still have to keep the possible language barrier and significant cultural differences in mind.
Oleksandr Boyko
Delivery Director at SPD Technology
“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 600,000 proficient tech experts combined, which is more than enough to find exactly the experts you need for your offshore dedicated team. The hourly rates of software engineers in Ukraine are almost twice as low as those in the US, but the high level of skills remains.”
What to Expect in 2024 If You Plan to Hire a Development Team?
According to Global Market Estimates, the global software development outsourcing market is expected to exhibit a CAGR of 11.5% from 2023 to 2028, so this year we can expect a massive expansion in this area. Worldwide IT spending is expected to total $5 trillion in 2024, an increase of 6.8% from 2023, according to the latest forecast by Gartner. The organizations will continue to invest in digital technologies, despite the global economic slowdown.
A few years ago, the main reason to hire a dedicated development team was to cut costs. While this motivation is still an important factor in outsourcing, this year we should expect more focus on the quality of the service. Companies will be willing to pay more money for services if they add value and quality to their organization.
SPD Technology offers the best services possible for a reasonable price, always keeping the quality of the product and the interests of our clients front of mind. We have the capabilities to build your dedicated team fast, so you can start achieving your software development goals as soon as possible with a team of the most suitable experts.
In June 2008, we partnered with NimbleCommerce, and in 2016, this startup was acquired by the BlackHawk Network. However, SPD Technology’s team continued working on the project. Our team consisted of a total of 78 permanent team members, working in several dedicated teams, who performed business processes and assets consolidation, data transformation/migration, and post-transition support for the new owner of the project – an industry-leading branded payments company.
Highlights Client Founded in 2001, Blackhawk Network (BHN) is a financial technology company that specializes in providing prepaid gift…
Explore CaseConclusion
Hiring dedicated development teams is a strategic decision that demands a thorough and well-structured approach. When implemented right, it allows for building a skilled development team in a more time and cost-effective way compared to hiring in-house employees, access specific expertise on-demand, and stay flexible during your software project development lifecycle.
Setting up a dedicated team may seem challenging on the surface, but with the right vendor, you can achieve great results. We, at SPD Technology, know that, because for nearly two decades we have remained a trusted provider of dedicated teams for 100+ clients of various industries and sizes. Rely on our dedicated development team services, to secure the success of your product!
FAQ
- Why choose a dedicated development team?
Choosing a dedicated development team can offer several advantages for businesses looking to undertake software development projects. Some of the most important reasons include:
- Access to professionals with specialized skills and experience in various technologies.
- Achieving more cost-effective than maintaining an in-house team, especially for short-term projects.
- Flexibility to scale up or down based on project requirements.
- Allowing your in-house team to focus on core business functions, while the external team handles the technical aspects of the project.
- Gaining access to a diverse pool of global talent, potentially bringing in different perspectives and approaches to problem-solving.
- How to choose a dedicated development team?
The key steps for this process include:
- Defining project requirements.
- Checking expertise and experience of team members.
- Asking for client references from previous projects.
- Inquiring about the team’s project management and communication practices.
- How to hire a dedicated development team?
- You can start with researching online platforms, referrals, and professional networks to identify potential development teams.
- Once you’ve shortlisted potential teams, request detailed proposals. This should include information on the team’s approach to your project, estimated timelines, and cost structures.
- Conduct interviews to assess the team’s technical skills, problem-solving abilities, and communication.
- Ensure alignment with your project goals and values, and consider starting with a small trial project or period to evaluate the team’s performance and compatibility with your organization.
- Make sure to clearly define the terms of engagement in a contract. Address issues such as deliverables, timelines, payment schedules, and confidentiality to avoid misunderstandings later.