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The Ultimate Guide to Dedicated Software Development Teams

#Dedicated teams

Working with a dedicated team means hiring the professionals you need to carry out the tasks you can’t (or don’t want to) do in-house. There are plenty of cases when hiring a dedicated team is the best way to cooperate with an outsourcing vendor.

You would need a remote software development team if:

  • Your company doesn’t have the necessary talent and doesn’t have the time to go through the recruiting process either
  • Some functions take up too much time of your professional team 
  • You’re losing focus because of all the side work you’re doing
  • You need to build an MVP or a demo quickly
  • Your company is looking to expand to a new, unknown market
  • The project scope grew unpredictably
  • You need to free up your in-house team for other purposes

Also known as team augmentation, dedicated software development teams help startups and mature businesses reach specific business goals. Just look at these software development outsourcing stats:

  • $85.6 billion was the market share of global outsourcing in 2018. 
  • 35% of companies outsource IT services because it frees up resources and allows them to focus on the core business.
  • 41% of CIOs expect their outsourcing spending to increase in 2020. 
  • Out of the companies that chose to outsource, 24% do it to increase efficiency, and 18% do it to receive assistance from an expert.

We’ve compiled everything you need to know about dedicated software development teams and staff augmentation into an extensive guide you’ll definitely want to read before hiring a dedicated team for your project.

Table of contents

What is a Dedicated Team Model?

A dedicated team is one of the three most popular models of collaboration between a client and a software development service provider. The other two are the time & material (T&M) and the fixed price (FP) models. We’ll talk about them later.

When clients decide to work according to the dedicated team model, they get a team of professionals meticulously selected according to the requirements of a specific project. This team becomes a natural extension of your internal team, and the cooperation works best if you perceive and treat them as the remote employees of your company.

A dedicated software development team can include:

  • front-end and back-end engineers
  • quality assurance engineers
  • UX/UI designers
  • DevOps
  • business analysts
  • project managers, and others.

When you work with a dedicated team, you get a group of tech pros that are focused on your project solely and completely. The outsourcing vendor is responsible for attracting new specialists and the administrative support of the team. This allows you to control the workflow and switch your attention to high-level tasks. Plus, the overall performance of the team and the KPIs of each individual member are constantly evaluated to ensure the team’s efficiency. If something goes wrong, you can always adjust the workflow. 

Outsourcing service models comparison

What Does a Dedicated Team Mean in Terms of Scope, Time, and Cost?

Having a dedicated team may sound like a lot of commitment and rigidity. But the fact is that this cooperation model is both flexible and straightforward when it comes to the scope, time, or cost.

Scope

Dedicated team is the most flexible model in terms of requirements. As the client, it’s up to you to decide on the scope and the workload of the project. Because the dedicated team members are de-facto your employees, you communicate with them directly and frequently, which makes altering the scope quick and less painful.

Time

Transparent cooperation also lets you and the vendor agree on how you’re going to handle deadlines. Hiring the team for a specific job, project, or period is how this approach works most often. However, if you’ve enjoyed working with the team, you can always negotiate the extension of your partnership.

Cost

The dedicated team model is very clear when it comes to cost tracking. Usually, clients pay monthly, just as they would pay their in-house employees. The sum consists of the monthly salaries of the dedicated team members and the vendor’s fee (administrative, infrastructure expenses, and overhead).

Dedicated Team vs. Time and Material Model

Back to the collaboration models.

The time & material model means that you’re paying for the result of your cooperation with the vendor’s team. No coffee-drinking, social-media-scrolling time included. It’s your way to go if:

  • you have a small project
  • all you have is a concept or idea
  • you’re planning to build an MVP 
  • you don’t know the target market
  • you need updates or minor features
  • the scope is dynamic
  • your project doesn’t have the requirements, price, or deadlines figured out yet

The dedicated team and the time & material models share some similarities, like efficiency and flexibility, and some cons, too. For example, both models require the client to communicate with the outsourced team frequently.

Largest advantage: The time & material model is result-oriented.

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Largest disadvantage: It’s hard to plan or control the budget.

Dedicated team vs. Fixed-price

The fixed-price model means that you and the software development vendor you’re partnering with have agreed on the scope, the deadline, and, as the name suggests, the price of the project. This is the critical part: the model doesn’t allow the product requirements to change much. Sure, you can negotiate on altering them a bit, but that almost always means that you’ll have to move the deadline and pay extra.

The dedicated team and the fixed-price models have a crucial trait in common: when you sign up for either of them, you know when to pay, whom, and how much. Since the team, the scope, and the deadlines are agreed upon in advance, there will be no budget-related surprises. However, the preparation of the detailed specifications for the vendor will take up a lot of time.

Go for the fixed-price model if:

  • your project has extensive specs and a clear goal or results
  • all the procedures are known and negotiated beforehand
  • the deadline is set in stone
  • you don’t feel the need to control everything
  • you aren’t planning to change anything about the project in the process

Largest advantage: You can plan your budget ahead.

Largest disadvantage: Less flexibility in terms of the project scope.

When the Dedicated Team Model is a Good Choice?

When to choose dedicated team model

Before you get down to selecting a cooperation model, you have to examine your business needs and evaluate the risks first. The dedicated team model works for:

Projects that are looking to grow and expand quickly

If you have a big project that is expected to grow into an even bigger one, look for a dedicated team. This approach will let you assemble a team quickly, skip the tedious recruitment and hiring processes, and hand-pick the members of the team yourself. Your in-house team is then left to work on the more important, business-oriented tasks while the augmented team does the additional work.

Long-term projects with multiple tasks

We’ve already mentioned that the dedicated team model is flexible. In an industry that is as rapidly developing as tech, not embracing flexibility means losing opportunities and failing to implement brilliant ideas. It’s okay to change requirements in the process of development as long as you have a dedicated team to back you up and keep the quality high throughout the SDLC.

Projects with a fixed and considerable workflow

Since you’ve hired an entire dedicated team to work on your project, you need to provide them with enough work to keep their pipeline busy. Otherwise, you’ll have to pay for the days (or weeks) they sit around with no active tasks to do. This is far from cost-effective and discourages the team that can’t take up any other projects from other clients since it’s dedicated.

Companies that plan to expand 

A successful business grows and expands. If that’s your case, you’ll soon have to hire more people. A dedicated team that has been working with you for some time now will be able to help you with the onboarding of the newcomers. Since your dedicated team members already know the ins and outs of your projects, they’ll put your new in-house team members into the picture. Plus, if your dedicated team works in the country you are planning to expand to, you’ll already have trusted partners who can give you some insights on the new market.

When the Dedicated Team Model Doesn’t Work

You have a strictly limited budget and a rigid deadline

A dedicated team grows together with your business. Sometimes, you need to add more functionality to the project. Then, you see that a mobile app would complement the solution you’re building perfectly. The team grows, and soon you’ll have to hire another project manager. Then, one day, you see that having a full-time designer on the team isn’t necessary anymore. All these changes can be done painlessly when you’re working with a dedicated team. But if your budget is fixed, you can forget about this sort of flexibility.

The project is tiny

When your project is short-term and small-scale, it’s easier to find a software development company that will build it for you. On the other hand, dedicated team is your go-to model if you know that the project is going to be vast, there’s no deadline set, and you’ll need two back-end and two front-end developers, a QA engineer, a business analyst, a designer, and a technical writer just to get the project up and running.

You the project scope is set

If you’ve put a lot of hard work into making a detailed plan of your project and its features, know exactly what technologies you want to use, and aren’t willing to compromise any of that, a dedicated team isn’t your best choice. When the scope is settled, going for the fixed-price model might be a better idea.

You don’t trust the software development vendor

Any cooperation is built on trust, but it’s more important for a dedicated team than with other cooperation models. With a fixed-price model, you give the team detailed and straightforward instructions. How much do you need to trust a baker if you provide them with a list of the ingredients you want, the color, and the date when the cake needs to be ready? The time & material model requires you to trust the team more, but you can stop the cooperation the moment you start feeling that what you and the team don’t get along. But employing a dedicated team is a commitment you invest your time and effort in, and you can’t have a committed relationship without trust.

Pros of the Dedicated Team Model

So, you have a long-term project with a flexible scope you’d like to manage yourself, and you’ve chosen the dedicated team model to carry it out. In this case, we’re sure you made the right decision. Working with dedicated teams offers lots of advantages.

A cost-efficient alternative

Numbers vary, but the average in-house rate is $70/hour while the average outsourcing rate is $35/hour. You may, however, find an outsourcing vendor that isn’t that much cheaper to work with, but they are sure to offer the efficiency you could never reach with your in-house team.

No-fuss hiring

The vendor usually has a pool of professionals you can hand-pick candidates from. This gives you access to the skills or talents that would have been hard to find otherwise. While the dedicated team model does require you to be involved in the hiring process, your job is to select the people that fit your company principles best from the shortlist. If you’re lucky, you might even find a close-knit team that has already collaborated on a couple of projects before.

Transparent management and communication

Once again, the dedicated team is like an in-house team that works in a separate office. You’re managing them directly, and that includes a lot of daily communication. When there are no intermediaries in the working process, you’re less likely to miss or misunderstand something. Plus, you always know what your team is doing and where they are on the progress scale at the moment.

A flexible scope at a predictable price

With a dedicated team, you get the flexibility of a time & materials project and the predictability of a fixed-price one.

A committed team that adopts your culture

It’s important for a new employee to understand your mission and help push the company toward the joint goal. You’d like to expect the same from your outsourcing partner, and a dedicated team is most likely to adopt your culture and cheer for your company.

Cons of the Dedicated Team Model

No cooperation model is perfect, so choose the one that brings the least risks into your cooperation. When we talk about the dedicated team model, it’s not a good fit when:

You don’t have enough resources to manage the team

We can’t stress this enough: working with a dedicated team is like having an in-house team that works in a remote office. And someone has to manage that team, communicate with them, keep them updated on the changes, and monitor their workflows. On top of that, the manager would also need to meet with the team from time to time personally, keep them motivated, and in line with the company’s mission and principles. Do you have a manager who could do that?

It’s an easy, short-term project

Hiring a dedicated team means investing time in selecting team members, aligning them with your project goals and other team members. Do you think it’s feasible to go through all that trouble just to dismiss the team after 1-2 months?

The vendor’s team is in a different time-zone or differs culturally

Imagine that you need to tell something important to the team, but none of the members will be awake in the next five hours or so. Alternatively, how would you feel when a dedicated developer doesn’t work on Fridays but needs to contact you on a Sunday? Even if these differences aren’t critical to you, you always have to keep them in mind.

Where to Find and Hire a Dedicated Tech Team?

Now that you’re positive you want to hire a dedicated team to build your project, your next step is finding one. Sure, Googling works fine, but it’s so easy to get overwhelmed with all the results. Try narrowing down your search. To find a dedicated team that will help you carry out your tech project (or at least its tech part), go through:

They will have similar descriptions and decent pricing, so you have to look for the ones that resonate with your views and goals. As you narrow the vendors (or teams) down, really put effort into getting to know them. Only after that you can make up your mind.

Best Countries to Hire Remote Developers

You’ve probably heard that some countries are better at providing software development outsourcing services. Usually, these are countries from Asia, Eastern Europe, Central, and South America. Let’s look at some of the most popular destinations and compare them in terms of price, the number of people working in the tech realm, proficiency (TopCoder Rank), and English level (EF EPI).

CountryMiddle SEQA engineer# of tech professionalsTech proficiency English level
Ukraine$36$3343,000550.62
Poland $37$3343,000461.49
Russia $32$3245,000152.32
India $21$20630,0001257.3
Mexico $40$3930,0003549.88
Brazil $46$4066,0001550.66

Dedicated Team Set-Up Process at Relevant Software

Once you’ve selected the vendor, it’s time to set up the team. Here’s how we do it at Relevant Software:

Gathering requirements

We start by taking your requirements. These usually include a project description, job descriptions, team size, and the desired workflow to assemble the right professionals for your project.

Assembling the team

If we have unoccupied tech pros that are in between projects at the moment, you can hire them immediately. If we don’t have the required professionals, we’ll start a recruiting process that might take about a month. But if you need to assemble a team quickly, we can access the talent pools of our partners, and you’ll get the necessary tech specialist in under a week.

Talent selection

The HR team assesses the candidates to learn their background, tech skills, English level, and soft skills to choose the ones that fit the future project best. These shortlisted candidates are the ones the client will have interviews with later.

Integrating the team

We integrate the dedicated team into your ongoing project smoothly and painlessly. You are free to choose the preferred management approach and the tools you want the team to use. It would also be an enormous plus if you could pay the dedicated team a personal visit. You won’t have to fly in frequently (unless you want to), but that first face-to-face cooperation with the team is critical for relationship development.

The result  

You get the necessary specialists that answer to you directly, just like your in-house team. The only difference is that the team works remotely, and the software outsourcing manager will take care of the administrative tasks.

Legal Aspects Of Hiring Dedicated Team

The outsourcing vendor is usually the one who handles all the legal aspects of hiring and maintaining workers. However, you will have to consider the following:

  • Non-Disclosure Agreement (NDA). If you’re going to provide your dedicated team with sensitive internal information, it’s a good idea to sign an NDA first. The document has to state what information is considered confidential, that a person can use the disclosed information for the project purposes only, and what the penalty is.
  • Statement of Work (SOW). This document should specify the scope of work, the deliverables, the schedule, the acceptance criteria, the duration, the standards, and any other terms, conditions, or special requirements for the future project.
  • Master Services Agreement (MSA). This document defines your cooperation with the vendor. It is the place where you want to specify the terms of payment, dispute resolution, and intellectual property rights. By the way, do you know who owns the rights to the solution your dedicated team developed for you? If you think that it’s automatically you because you’ve hired the team, think again. The agreement should explicitly state that you own the copyright to all the work done while the team has been working for you. Otherwise, the vendor will have the rights to it.

Dedicated Team Onboarding Process

Congrats! You’ve signed the contract with an outsourcing vendor that is providing you with a dedicated team to implement your software idea. Now what? When is the development going to start? How do you introduce the teams to each other? Will you be able to spot the first signs of arguments between them?

The onboarding process might seem daunting, but it lays the foundation of successful and fruitful cooperation between the client, the in-house team, and the extended team. Here’s what you need to do to ensure that the onboarding goes smoothly.

Describe the business context to your dedicated team

They may be working two time zones away from you, but your dedicated team members are now a part of your company. So, make sure to explain your strategy and vision, your goals and competitors, your market and users, your strengths and weaknesses to them. Learning the business context before getting to development guarantees that the new tech pros you’ve hired will work smarter and always keep an eye on your company’s goal.

Give your in-house team a pep talk

Even if your in-house team understands the need to hire a dedicated team, there may be tension or even rivalry between them. Your in-house workers may start feeling superior, which can lead to the dedicated team feeling left out. So, please, have a nice talk with your in-house team. Make sure to tell them that no one doubts their competence, and they are not being replaced by the dedicated team.

Make sure to share all the necessary project documentation

Your extended team has to have access to all the resources it will need to hit the ground running. The most important are the backlog, the technical documentation, and the code repository. If you have other valuable things to share, that’s great, but don’t overwhelm the team with new information. If it’s something they will need later, then give them the information when it’s needed.

Try to organize an offline meeting

While most of the dedicated team onboarding can be done online or via video conferencing, you’ll need real-life communication to really form a bond between the teams. The tension and rivalry that may arise will result in poor project performance. After all, it’s easier to disapprove someone you’ve never met, so in-person communication can be the key to long-lasting and supportive relations. You will either have to fly your in-house team over or invite the dedicated team to visit (depending on which team is smaller), and while this is a lot of money, think of it as an investment.

How To Manage a Dedicated Team

How do you manage a team you can’t see, text with more than you talk, and visit once a month (at the best of times)? It’s actually not that hard if you trust your team. All you’ll need to do is:

Organize scheduled standups

Gather the team via a call or video conferencing and ask each to answer three questions:

  • what did you do yesterday? / what has been done so far?
  • what problems did you face?
  • what are you planning to do tomorrow?

Holding daily meetings like this is a good practice that keeps everyone updated, allows employees to structure information on what they’ve done, and plan future tasks. Just be sure to moderate these standups and make them short and to-the-point. If someone starts deviating from the plan, gives too much detailed information, or needs help, talk to the person individually after the meeting.

Leverage tools

Fortunately, there are plenty of tools you can use to keep track of your dedicated team and its activities.

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All-in-one solutionsTroop Messenger, BasicOps, TipHive, Hibox, Paymo, Hive
Managing tasksTrello, Jira, Twoodo, Wrike, Worksection, Avaza, Taskworld, TeamGantt, Fusioo, Eylean Board
Document collaboration toolsGoogle Drive, Bit.ai, TipHive
Team communication toolsSkype, Slack, SocialChorus, UberConference

Establish work procedures

Try to think ahead and answer the questions dedicated team members may have before they even arise. Make sure that they know what your work procedures are and follow them correctly. Who is responsible for what? How do you create new tasks? How can you share files? Whom to contact if you have access issues? Your dedicated team has to know answers to these and other questions or know where to find them.

Provide constant feedback

Being responsive is an essential part of managing a dedicated team. Software engineers may have dozens of questions, big or small, that need to be answered if you want your product to meet your expectations. The feedback of a product owner is what guides the remote tech pros who can’t casually meet you in the office kitchen and say “I’ve been thinking that there is a better way to implement that feature.” Sometimes, your answer defies the next steps of the employee, and while you’re procrastinating, the person (or the team) doesn’t know what to do next. This slows down the development pace and leaves the workers frustrated. 

Don’t forget they are professionals

Sometimes, you may think of your dedicated team as a younger sibling of the in-house team. Don’t do that. Both teams need to be equal in your eyes because they both consist of high-profile tech experts you picked out yourself. If a dedicated team has ideas, they should also be considered. Don’t forget that you hired that dedicated team specifically for their tech expertise, so treat them as legitimate professionals, take their opinions into account and praise the team members for the work they’ve done.

How to manage a dedicated team

How to Fail with a Dedicated Team

A dedicated team can be your helping hand when it comes to developing a massive software solution or carrying out the functions your in-house team lacks. But you have to be careful and pay attention to the following red flags if you don’t want to fail with your dedicated team.

Communication bottlenecks

It’s sometimes hard for people to talk to others, especially in a foreign language. At the same time, it’s critical for the management to constantly be updated on who does what in the dedicated team. So, make your communication regular, transparent, and to-the-point to avoid misunderstanding. Also, don’t forget about language barriers. If you or your teammates have trouble understanding each other, it might be a good idea to work on those English skills.

Poor motivation

It’s not uncommon for a dedicated team to feel like an outsider. While the client and the members of the in-house team communicate in person all the time, they may be discussing matters and making decisions over lunch or at corporate meetings. Feeling left out leads to demotivation, and employees with poor motivation can’t work effectively. In this case, it’s necessary to have a no-judgment communication channel between you and the members of the dedicated team. Praise works well, too, as well as individual bonuses and setting up a development plan for each employee. Yes, sometimes, you also need to be the HR person of your team. But hey, if you didn’t want a true partnership, you wouldn’t have chosen the dedicated team model.

Failing to maintain a product strategy

As we’ve mentioned earlier, it’s a challenge to keep the dedicated team in the loop. The feeling of detachment may result in losing focus and failing to keep up with the product strategy. Someone has to make sure what the dedicated team is doing aligns with the product strategy set by the client. Ideally, that would be a product owner’s job, but if you don’t have one, you’ll have to maintain the dedicated team’s track yourself.

Trouble staying agile

Being agile means being adaptable: if requirements change, it’s noted and taken into account right away. While dedicated team is a flexible cooperation model, you can never react to changes as quickly as an in-house team because of communication delays. To mitigate that, make sure to give feedback to the dedicated team quickly and frequently, keep standups regular, and lose micromanagement.

Outsourcing your core functions

This is not a red flag. It’s a no-no. Never outsource your core business functions to an outsourced team, no matter how good you believe they are. If there’s a thing you do better than anyone else, continue doing it yourself. It’s your competitive advantage, something that sets you apart from the competition. So, instead of outsourcing your core competency, keep the dedicated team busy with the additional functions that take up your time and efficiency. Do what you do best and outsource the rest.

Examples of Successful Companies that Leverage Dedicated Teams

Working with a dedicated team is not something only small businesses and startups do. It is the go-to cooperation model for many world-renowned companies as well.

Zapier

Zapier team works from 13 countries. Wade Foster, the co-founder of Zapier, says that the distributed development model is a better way to work, that allows hiring smart people no matter where in the world.

Slack

This company values around $3 billion, and the app has more than 8 million daily active users. The interesting fact is that web interface and mobile apps of Slack where developed by an outsourced team.

GitLab

GitLab is another company with a team distributed across the globe. Victor Wu, the Product Manager at GitLab says that remote work is a clear business advantage that has a multitude of benefits that far outweigh the drawbacks. 

Some other companies that have distributed development are Apple, Oracle, American Express, IBM, Verizon, Amazon, Doist, Automatic, Buffer and 10up.

The Bottom Line

We’ve tried to pack this guide on dedicated software development teams with all the information you may need on the topic. Here are the key points:

  • Working with a dedicated team is a way to augment your software team and enhance it with the expertise you lack.
  • Hiring a dedicated team is your best option if you have a long-term project with flexible requirements and no set time frame, but want your expenses to be predictable.
  • You pay a monthly fee (just like a regular worker) that consists of the salaries of the team members and the administrative services provided by the vendor.
  • This cost-effective alternative to in-house hiring provides a team that is committed to your mission.
  • You will have to manage the team yourself, but in the end, you’ll get a trusted partner that will help you build a stellar software solution.

If you still have questions about dedicated software development teams, we at Relevant Software will be glad to answer them. And if you would like to assemble a team for yourself, feel free to contact us.

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