Amid digital transformation globally, the outsourcing industry reached a landmark in 2023, hitting a staggering $731 billion. This suggests a robust inclination of businesses, both large and small, towards outsourcing strategic functions, notably software development.
Within this affluent space, the dedicated software development team model is gaining traction for its inherent benefits: cost-effectiveness, adaptability, and access to specialized skills. From helping startups innovate to assisting enterprises in scaling operations, this model fits well within the increasing outlay towards outsourcing.
In this article, we demystify the dedicated team, comparing it with other prevailing models, and unveiling its unique benefits, cost considerations, and ideal hiring scenarios.
What Is the Dedicated Team?
Amid a myriad of cost-beneficial options for business development in the digital age, outsourcing remains a favored beacon. Specifically, the dedicated software development team model receives considerable attention. With 40-50% cost reduction achievable for companies by leveraging such a team, it's no wonder this model stands out in the crowd.
Understanding the appeal of this model underpins the growing popularity of dedicated software development teams in remote collaborations. Crafted with a suite of talented specialists, these teams focus on specific projects for a client, operating either remotely or as an integral extension of the client's in-house team.
The key to this model is its focus on your goals. Unlike other models, where developers juggle several projects, those in a dedicated team are told, “Forget everything else people, this is your only concern for the time being, show your best while you’re at it.”
At the same time, the client is in the driver's seat and chooses who will be part of the dedicated software development team, decides how many specialists are needed, and sets their work schedule – just like with a regular outstaffing endeavor.
And there's more as outsourcing providers manage time-consuming tasks like administration, HR, tax, and social benefits, enabling you to hone in on your project's business-critical tasks.
Roles within the Dedicated Software Development Team
The model's strength lies in its flexibility to be specifically tailored to the project's needs by selecting the ideal individuals for each role. Thus, the bespoke dedicated team could consist of the following experts:
- Software Engineers (Front-end, Back-end, Full-stack, Mobile Developers): These professionals are the building blocks of the software, converting abstract concepts into functional applications.
- Quality Assurance (QA) Engineers: These meticulous testers ensure the software's robustness and functionality, troubleshooting and resolving any errors identified.
- Project Managers: Guiding the team, they efficiently manage resources and ensure the project stays on course, meeting critical timelines and milestones.
- UI/UX Designers: These creative architects enhance the user experience by designing the aesthetic and navigable aspects of the software.
- System Architects: Responsible for shaping the software's overall structure, they decide on technology frameworks, and database structures, and ensure the systems are scalable and efficient.
- DevOps Engineers: These experts maintain a balance throughout the software development lifecycle by introducing efficient methods, tools, and strategies for coding, deployment, and maintenance.
- Business Analysts: Serving as the bridge between client requirements and technical solutions, these professionals translate the project's needs into executable plans for developers.
In addition to the roles mentioned above, some projects may warrant other specialists, such as:
- Database Administrators: Managing the software databases, these professionals ensure secure and accurate data storage and retrieval.
- Network Engineers: These experts handle network connections, ensuring steady and secure communication and data exchange.
- Technical Support Staff: Serving as the first line of help for users, they troubleshoot and resolve technical issues, ensuring a smooth user experience.
Each of these roles brings specific expertise to the software development process, contributing to various aspects of making applications functional and user-friendly.
Dedicated Teams vs. Other Engagement Models: Which Is Better?
In a world brimming with a variety of collaboration models – from project-based collaboration to outsourcing or team extension, understanding where a dedicated software team fits in can be a daunting task. Each model has its strengths and weaknesses, its opportunities and risks. Does a dedicated software team outshine the competition, or are there scenarios in which alternative approaches take the lead? Let's delve into the specifics to unveil the truth.
Dedicated Team vs. Team Extension
Although seemingly similar, there are crucial differences between the dedicated development team and the team extension. A dedicated software development team is a cooperation model where you have an outsourced team fully committed to your projects. This is ideal for projects where the tasks keep expanding and evolving. You get a team that centers solely on your tasks, which translates into a better understanding of your project's unique needs over time. Plus, you have the liberty to control the strategic direction and structure of the team. If the workload grows, the team can be scaled up smoothly with the required skills. Essentially, the dedicated team model offers experienced talent access without the high costs associated with recruiting, onboarding, and maintaining an in-house unit.
Contrarily, team extension or staff augmentation, as it's often called, is about embedding skilled professionals into your existing team from a third-party provider. This model comes in handy when you need to bridge the skill gap in your team on short notice. As with the dedicated team model, you keep high-level control, managing your original and extended team members in much the same way. An advantage here is the short notice at which you can bring professionals on board to fill in gaps in your team.
In a team extension model, your organization maintains a high degree of control and management authority over the outsourced professionals. They are expected to comply with your company's rules, systems, and workflows. You manage the extended team members in much the same way as your in-house employees. This direct control over the extended team is one of the key distinguishing aspects of this model. The extended team members are integrated seamlessly into your existing team, which promotes smooth collaboration and efficient project workflow. They are expected to adapt to your company culture quickly, helping maintain team cohesion.
The choice between a dedicated team and a team extension model relies heavily on the specificities of your project, the capacity of your internal team, the project timeline, and your company's strategic decisions. Also, explore the essential tips on scaling a software development team with team extension.
Dedicated Team vs. Self-Employed Freelancers
With freelancers, there can be a significant amount of time and effort spent on recruiting, managing, and payment processing. Freelancers often work on a project-to-project basis, and while they could provide diverse skills, their availability and commitment can fluctuate.
In contrast, a dedicated team works full-time on a project, sharing responsibilities and risks, and ensuring work continuity and quality. They're usually more structured in terms of process control, confidentiality, and deliverables than freelancers.
Here's a direct comparison:
Summing Up, When is the Dedicated Team Model the Optimal Choice?
A dedicated team is the best option when you need a team with complete focus, consistency, flexibility, and adaptability for your project. This model is especially well-suited for long-term projects where scalability, shared risks, and ongoing commitment are critical.
When you go with a dedicated team, you're effectively gaining a group of professionals entirely focused on your project, allowing for in-depth understanding and project-specific expertise to develop over time. This focus on your project helps in the creation of tailored solutions, thereby increasing the potential for success.
Another major advantage of this model is control. Like an internal team, the project's direction is still largely in your hands, allowing you to guide your vision effectively. You dictate strategic decisions and have the freedom to structure and manage the team according to your needs, choosing the right mix of skills and personalities for your project.
Scalability is also a significant plus with a dedicated team. As your project grows, and new functionalities and features are introduced, you can easily add new members with the skills you need. It saves you the hassle of hiring and training new employees internally, which can be time-consuming and expensive.
But one of the most appreciated advantages of a dedicated team is cost-effectiveness. Despite providing exclusive service, this model eliminates many overhead expenses, such as the costs of recruitment, equipment, office space, and additional employee benefits, since these responsibilities are handled by the service provider.
Beyond these, a dedicated team allows you to execute and manage long-term projects more simply and smoothly. They can adapt to project evolutions and changes, making them a sustainable, flexible solution. Given these reasons, a dedicated team model can often prove to be a more efficient, effective, and economical choice in many situations compared to other development models.
When Do You Need to Hire a Dedicated Development Team?
There are unique scenarios where the need for a dedicated team of specialists becomes a pivotal decision point. It could be the complexities of long-standing projects, managing unexpected workload spikes, or acquiring unique, specialized skills that your existing team might lack.
In such circumstances, opting for a dedicated team can serve as the most effective solution to maneuver through these challenges while ensuring quality and timely delivery.
Scenario 1: You have a startup or a small company aiming to create an MVP
If your idea is to build an MVP of a product, you may find the dedicated team model more than suitable solely for addressing talent gaps. Under this model, a group of experts stays focused on your project, enabling faster development iterations—an essential factor in being the first to introduce this idea to the market. It also means you can adjust team size as the MVP requirements evolve, ensuring efficient resource allocation, a critical factor for projects constrained by limited resources.
Scenario 2: You have a promising project idea but lack proper discovery
Let us imagine you have a promising idea, but it hasn't been fully explored. There might be gaps in understanding how to turn this idea into reality due to missing information about its implementation, audience, market potential, or technical requirements. This lack of product discovery might be due to limited resources or expertise, requiring better research and planning to shape the idea into a workable project.
In this case, a dedicated team model can fill in the missing pieces. When the entire team is in one place, planning and early steps become simpler. This model provides access to the expertise and resources required to lay the foundation for the whole software development mechanism by starting with proper discovery.
You can easily form a team consisting of experts who are usually involved in project discovery, such as PMs, BAs, QA consultants, etc. This approach will let you forget about spending months on testing and putting a lot of effort into setting up the successful development process.
For more details on project discovery flow, see our guide to product discovery workshop.
Scenario 3: You've moved beyond the initial startup phase and have long-term plans to grow and expand
Startups beyond the pre-seed stage can gain a lot from hiring a dedicated software development team as well. At this stage, you will likely have long-term goals and ambitions to scale your business, reach new markets, expand your product line, or increase your customer base.
A dedicated team copes with this task perfectly. In addition to saving on hiring expenses to get this job done, you get access to developers with extensive experience in the field to scale your product fast.
Scenario 4: You are a mid-sized business with a product ready for scaling or enhancements
If you’ve already established a product or service that has gained some traction in the market, you might want to make it better to meet more demand or explore new markets. This means you will need to work on improving the product, upgrading how it works, or adding new features to meet what customers need now.
Again, the dedicated team model is a perfect match as it provides a skilled workforce to do this work diligently. Plus, a dedicated team is more flexible in terms of its size, structure, and focus, which is critical at this stage of the product. You cannot predict how customers will respond to your innovations or what the market will expect from your product next, so you can't predict the experts or team you'll need.
Scenario 5: You represent a large company with existing products in need of modernization and migration to new technology frameworks
In this scenario, your current products might be running on old systems or outdated technology, causing issues with efficiency, compatibility, or meeting today's standards. So, you might have a goal to upgrade these products with new technology to make them work better, fit with today's systems, and meet current industry rules.
The dedicated team’s focused attention on this goal ensures that the necessary skills and knowledge are directed towards the specific technological upgrades needed. Such an exclusive focus allows for faster iteration, testing, and innovation in line with the fast-evolving nature of technology.
How to Calculate the Cost of a Dedicated Team Model?
Unfortunately, no one can provide an accurate cost estimate for a dedicated team without knowing your requirements. However, we can help you understand the calculation logic behind it and provide some approximate ranges.
The cost of a dedicated team model can be calculated using the following general formula:
“Total Cost = (Hourly rate or monthly rate) x number of team members x project duration”
This is the only thing you pay for – there are no extra costs for office rent, taxes, or social benefits. Moreover, under the dedicated team model, there is usually no need to search for specialists to join the project. An outsourcing team provides all the staff required to complete the project tasks. As a result, it means fewer costs to consider on your side.
Overall, the cost of a dedicated team can vary depending on factors such as the outsourcing company's location, the seniority level of specific team members, and the technologies used.
Below are the typical hourly rates for software development in various regions as of 2023 (according to such sources as Indeed, Upwork, SalaryExpert, and TopTal):
- North America: $78
- Western Europe: $73
- Eastern Europe (Ukraine): $25-45
- Latin America: $64
However, the average rates for software development services can vary a lot from the actual price for a few reasons:
- Different technologies have different costs, with some being more unique and pricier.
- The majority of developers are juniors, affecting the average cost.
- Developers with excellent hard skills and English proficiency are in high demand and get paid more than the average.
Starting Collaboration with a Dedicated Team: How Does the Process Look?
The way businesses engage, communicate, and manage the dedicated team significantly influences the effectiveness of the collaboration. While approaches vary across organizations, we have a unique workflow that catalyzes success when we are chosen as the tech partner.
Requirements, scope, and price estimation
At this step, be prepared to articulate your needs clearly, define skills gaps or at least provide a basic overview of your problem. Our team will conduct a certain Q&A interview session with you to find out as much as possible about the required scope of work and the number of specialists needed. This way, we will be able to make a rough estimate of your future project.
There are two possible scenarios here:
- You may already have a plan and clear requirements.
What we do: We'll chat about the budget and timelines, taking into account the priorities and timelines provided.
- You may find it hard to understand the exact scope of work needed.
What we do: If the client isn't sure about the scope, we can conduct a discovery stage. Here, we'll form hypotheses and test them with the help of prototypes. We then check the test results to see if the current scope matches our goals. If it doesn't, we continue exploring and researching until we find the right scope.
2. Team setup
The next step is all about defining the dedicated team structure and putting the talents together. If you have a small project, this process may take up to several days. In case you need to hire a dedicated software development team of, let’s say, 20 specialists, it may take more time as we will need to assess their availability for your project or consider the need to hire development team members.
3. Team review
At this step, we can finally bring all the puzzle pieces together to create a proposal that includes the expected team composition, timelines, and budget. We then schedule a call to share our proposal with the client and plan any additional research activities, if necessary.
4. Team onboarding and kick-off meeting
Now's the time for our team to get to know yours. You'll share your company's culture, expectations, and workflow, assign tasks, provide tool access, and schedule one-on-one check-ins if necessary. After this, our team can begin work on the project.
Choosing the Dedicated Team: What We Offer
Selecting a dedicated team is a strategic choice. Our value proposition lies not just in providing talented professionals, but in a robust offering that aligns with your business objectives.
Even if you are unsure about the type of collaboration model you need, let us dispel your doubts and offer the best-fit approach to match your requirements.
Partnering with us means leveraging these key benefits:
- We work across the globe, meaning our talent pool is ready to be deployed immediately.
- We offer a scalable approach that directly cuts back on superfluous overheads.
- The size and skill set of your team can be scaled effortlessly based on your ongoing project needs.
- We bring to the table a wealth of practical experience across diverse industries like FinTech software development, eCommerce software development, logistics software development, and others.
- Our team consists of high-level experienced professionals who ensure smooth project execution and strategic guidance.
These unique advantages underline our firm position as a trusted partner in the industry with a proven track record. But we do not stop at being service providers. We step up to become a part of your team, integrating smoothly for a seamless work experience and driving your success forward. You can contact our experts to make the first step at any time.