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Explaining the Dedicated Development Team Model: What It Is, How It Works, and When You Should Consider One

11 min read

Are you a startup founder, an investor, or an entrepreneur that wants to create a product? Or are you in a position where you hire a software development team?

If you gave a positive answer to any of these questions, read this article.

You will learn the following:

  • What is a dedicated development team?
  • What is the typical structure for a dedicated development team?
  • What are the advantages and disadvantages of hiring a dedicated development team?
  • How does a dedicated software development team work?
  • When you shouldn’t hire a dedicated development team?
  • And more!

Let’s dive into the crux of this article.

What Is a Dedicated Development Team?

A dedicated development team is an outsourcing concept where developers cooperate with a startup to achieve agreed deliverables. This staff outsourcing model is one of the most popular and effective for tech startups.

Statistics by Avasant Research prove the relevance of this business model, as over 10% of most startups’ IT budget goes to outsourcing.

By collaborating with a development team, you’re requesting professionals to fill a knowledge gap in your startup. Albeit similar to in-house developers, you’re exempted from catering to their tax, HR, and administrative needs. This enables you to focus better on business issues while the development agency helps with your technical requirements.

The illustration shows an explanation of what a dedicated development team is

With the apt knowledge that you have about the development team, let’s discuss a suited structure.

What is the Typical Structure of a Dedicated Development Team?

Your technical requirements determine the composition of your team of developers. An ideal one for an application development project includes:

  • Product manager
  • Project manager
  • Business analyst
  • UX/UI designer
  • Tech lead
  • Backend developer
  • Frontend developer
  • Mobile developer
  • Quality assurance tester
  • DevOps engineer

If you’re venturing into the tech business, chances are high that you don’t know what each job description means. Let’s help you make sense of what each means.

Role  Description 
Product manager The product manager defines the needs of your target audience and the company’s business objectives that the product will address.

Then, he or she handles the implementation and launch of features.

Project manager The project manager’s job is to coordinate the team to finish the project according to the delivery plan, on time, and on budget.

In addition, the PM is responsible for communicating with the client and managing expectations according to Agile management practices.

Business analyst The task of a business analyst on a dedicated team is to create requirements for a future solution. Often, these are textual requirements detailing the logic and basic user experience, which are further refined by the designers.
UX / UI designer The primary role of a UI/UX designer entails collecting, researching, and evaluating technical requirements.

They then create a visual design that appropriately represents both the technical and business requirements of the platform.

Tech lead He or she leads frontend, backend, or mobile development teams: designating and overseeing the implementation of the development process, defining the technologies’ stack, and troubleshooting technical issues.
Backend developer The backend developer creates and maintains the technology necessary for the user-facing application to exist on the server-side interaction.

The backend code adds utility to everything the front-end developer creates.

Frontend developer The frontend developer implements the design of the UX/UI designer and ensures users can appropriately interact with the platform.
Mobile developer Mobile developers do the same job as frontend developers, but for mobile apps. In essence, they are responsible for making the interface work properly and interacting with the database on the backend to make the app work.
Quality assurance tester The QA engineer checks the performance of the application as required and suggests workflow improvements on the code, business logic, or UI design side.

Also, he or she checks the code for bugs and ensures that the code is written correctly to ensure efficiency and a great user experience.

DevOps engineer This type of software engineer build, test, and maintain the infrastructure and tools needed for rapid software development and launch.
This picture describes the detailed structure of the dedicated development team

Now that you understand how to onboard team members on to your startup, let’s discuss the advantages of this method.

Advantages of Hiring a Dedicated Development Team

According to Grandview Research, the global demand for development outsourcing is poised to grow 7.7% year on year from 2021 to 2027.  If this happens, the sector’s revenue will be worth $937 billion in six years.

This growth is fueled by numerous advantages of hiring a dedicated team for your software development project. Some include:

Benefit 1. Expertise

Outsourcing the technical aspect of your company’s operation opens your startup to professionals with the requisite expertise to develop your product to optimum satisfaction.

Most times, these professionals have already worked on a similar product, so they can offer you helpful advice and help you take advantage of minor details.

Through years of teamwork, the dedicated team already has an established workflow and is comfortable with task delegation.

You won’t have to do this from scratch and deal with conflicts that may arise.

Benefit 2. Access to a Larger Pool of Talent

If you lack access to a talent pool for your in-house team, then a dedicated team model is undoubtedly the way to go.

This option opens your startup up to a pool of professionals across the globe, allowing you to choose the best hands possible at a cost-effective price.

Numerous companies have enjoyed this benefit: some examples include Google, Skype, IBM, and other well-known technology companies.

Benefit 3. Faster Scalability and Flexibility

Outsourcing affords you top-notch flexibility in actualizing your project scope. It eases the process of reducing or increasing your team size at will without breaking employment laws. This flexibility is intrinsic to responding to changing business needs.

On the other hand, increasing your in-house team is pretty daunting, costs more, and is time-consuming. Reducing your in-house team size without a staff dignifying reason may affect your workers’ morale and significantly impact their productivity.

Besides, it can also dampen your company’s reputation as an employer.

Benefit 4. Cost Saving

Hiring a remote team for many US-based startups is a cost-efficient option, especially for both long-term projects. This is primarily because the cost of hiring developers varies with the country.

As this article on software development costs puts it, the US-based startup will spend $100-$150 an hour on a local software developer, but outsourcing to a dedicated development team in Ukraine only costs $40-$80. This helps to save up to $110 an hour.

The illustration shows the main advantages of a dedicated development team model

However, this business model also has its demerits to consider. Here are some disadvantages to remote outsourcing.

Disadvantages of Hiring a Dedicated Development Team

Outsourcing to software service providers has its drawbacks. Some of these include poor communication, time-zone differences, cultural differences, and so on. Let’s elaborate further.

Disadvantage 1. Too Many Vendors to Choose From

Deciding to hire a DDT opens you to another challenge. You’ll have to choose a web development team that best aligns with your business goal, but that in itself is tricky. Startups can choose from a local team or outsource to an agency completely domiciled in another nation.

Beyond this, there’s also the challenge of choosing a team with a suitable skill set that can guarantee your expected deliverable. To help streamline the hiring process, we’ll urge that you read this article for a better understanding.

Disadvantage 2. Time Zone Gaps

A significant demerit to outsourcing is time zone gaps. While this can be negligible in countries of the same time zone or with slight time zone differences, it’s a significant problem in some countries.

For example, between the UK and  India, there is a time zone difference of  5 hours 30 minutes. As such, a coding error noticed by a UK-based startup can’t be communicated with an Indian-based outsource agency at 2:00 pm (UK time). This will be 7:00 pm in India.

Thus, a much-needed update may not get the attention it deserves. Also, there will be public holiday differences.

Disadvantage 3. Cultural Differences

While outsourcing opens up your startup to high-quality employees, you may have issues with cultural differences.

Culture affects essential matters in product development through decision-making, reporting, and the definition of a completed task.

Other than that, inherent cultural differences often result in diverse opinions of the target audience or your products’ ideal visual components.

Thus, ensure you partner with an offshore software development company with dedicated team members that is culturally compatible with both your corporate culture and that of your target market.

Disadvantage 4. Lack of In-Person Communication

Remote teams eliminate the possibility of having in-person communication.

This, in turn, introduces a myriad of problems. A workforce that relies primarily on chats and emails is susceptible to miscommunication because effective communication also relies on other non-verbal cues, a good number of which can’t be succinctly translated into words.

The illustration shows the main disadvantages of a dedicated development team model

How Does a Software Development Team Work?

A dedicated development team is built by a vendor from the ground up, and it can be tailored to fit the client’s project requirement.

The software development agency takes care of candidate sourcing, helps to align the workflow with the development process, and synchronizes external and internal team efforts.

Below we will dive deeper into the different models of cooperation with a dedicated software development team.

Model 1. Hiring a Dedicated Team

A dedicated software development team is a group of remote specialists that assist in designing and building software that aligns with a specified goal. A tech vendor employs this workforce to work exclusively on your application.

This outsourcing model is particularly suited for:

  • Long-term continuous project
  • No time/resource to build an in-house workforce
  • Lack of technical expertise for the functionalities among in-house developers
This picture describes one of the models of cooperation with a dedicated team of software developers namely, hiring a dedicated team

If your startups align with the above criteria, then opt for a dedicated team.

Model 2. Hiring Resources to Expand the Team

This outsourcing model basically entails adding a lacking skill set from a vendor to your in-house development team–ensuring strategic competencies are confined to your office space. The extension model centers around time and materials contracts.

For example, you need 1 or 2 frontend developers with knowledge of a framework that is not on your internal team. Then it’s wise to think of an outstaff.

By adopting this model, your company reduces payroll, intake, and project management costs. It also gives you full control over the team’s productivity and deliverables. Additionally, the responsibility shift helps to reduce employment formalities while you focus on the core development process.

If the above description aligns with your startup’s goals, then this is the most ideal option for you.

This picture describes the second of the models of cooperation with a dedicated team of software developers, namely, hiring resources to expand the team or IT outstaffing

Model 3. Hiring a Team on a Project Basis

Unlike the first model, hiring a dedicated team, hiring a team on a project basis involves a one-time involvement of developers in the development of a specific piece of product.

For example, if you have a product, let’s say a website visual builder. It consists of a bunch of projects: drag-and-drop constructor, collaborative review tool, template constructor, and so on.

And while your in-house team handles 3 of the 4 projects, in order to develop the 4th project,  you hire a dedicated web development team or hire a dedicated app development team, accordingly to the type of the project.

This outsourcing involves explaining the complete requirements to a representative of a development service provider. This is often a business analyst or a project manager. These specialists then provide suitable expertise for the project and monitor the project till completion.

The outsourcing service provider can help meet the client’s needs and collaborate team’s efforts to meet the development process of the customer’s in-house team too.

This model works best for startups that want:

  • Time-saving solution
  • Cost-efficient
  • A one-off project that requires sophisticated skills and resources
This picture describes a third model of cooperation with a dedicated team of software developers, which is named hiring a team on a project basis

Now that you understand the different outsourcing types, let’s discuss what distinguishes the dedicated team model from others.

What Distinguishes the Dedicated Team Model?

For your outsourcing model, you have the option of choosing between a time and material model, a dedicated team, and a fixed price methodology. So, what exactly distinguishes them?

Let’s discuss that now.

Dedicated Team vs. Fixed Price

The fixed price model guarantees a fixed project budget, irrespective of the final expense and time. The ultimate advantage of this model is that startups can plan their exact expenditure.

Any alteration will require additional estimation and a new contract. Thus, the main requirement here is defined project scope and requirement. So which is the most suitable of the methods?

There’s no doubt that they both take different approaches, and their implementation differs.

However, if you’re working on a short-term project, then opt for a fixed price model. This model requires that you have well-crafted requirements and characteristics.

But if your project is highly sophisticated and susceptible to changing requirements, it’s best to choose the DDT model.

Another popular outsourcing type is the time and material model. Let’s discuss that.

Dedicated Team Model vs. Time and Material

The Time and Material outsourcing model entails paying for the effort and time of development.

As it relates to application and web development, it entails paying the development outsourcing company per hour. This is the most common outsourcing methodology. It’s deemed flexible, convenient, and adaptable.

Time and material can be a great option here if you’re keen on controlling your budget. Startups embarking on a long-time project should choose a dedicated team structure. Commonly, long-time projects have a time-changing scope and have high scale-up potential.

Thus it would help if you had an outsourcing model that guarantees maximum flexibility.

Illustration shows the main differences between the time and materials model, the dedicated team, and the fixed-price methodology

Let’s discuss why we recommend a dedicated team model over others.

When you Should Hire a Dedicated Team

A dedicated team model is ideal for complex and long-term projects that can expand in the future. This option is also the best when you lack clarity on your product and need a discovery stage. Let’s dive into more details of why you need this team model.

Hiring Reason 1. The Lack of Expertise

Suppose you are working on a project that requires skills or knowledge that your organization does not have. You can quickly build a qualified team, save costs, and develop your product quicker by adhering to hiring a dedicated team.

Hiring Reason 2. The Lack of Resources

Another case when you should think about hiring a dedicated team is the lack of internal resources to scale the product according to your business development roadmap.

That is, you have enough budget for development, your product demonstrates excellent customer attraction and retention rates, but you lack the available developers to synchronize development with growth.

Hiring Reason 3. Limited Development Budget

When you have a fixed budget to attain specific goals, it’s best to opt for a dedicated team that falls within the stipulated budget. Quite often, you don’t need development engineers in your locality. Why? Because it can be cheaper.

According to this article, the cost of developing an application in the UK is $100-$120. For eastern Europe, the same app will cost $30-$50 an hour. Thus, outsourcing might be budget-friendly if you’re outsourcing to a country with a much cheaper rate.

The illustration shows the main reasons for hiring a dedicated team

When you Shouldn’t Hire a Dedicated Development Team

As beneficial as having dedicated development workers are, there are instances where it’s not the best option. Don’t hire a dedicated development team when you don’t have a budget and lack funds for marketing. Let’s dig deeper into both.

Reasons Not to Hire 1. No Development Budget

Getting a software development service without a development budget is likely going to be futile.

The two price-determining factors for applications are the cost of labor and the material cost (required time to build features and functions into the live app).

Lack of budget prevents you from adequately accessing bids and properly putting your development project in context.

Reasons Not to Hire 2. You Have No Marketing Budget

According to Forbes, startups that succeed don’t ignore anything. One crucial aspect that many co-founders fail to budget for is marketing. Imagine creating a product that no one knows. That’s a potential consequence of not having a marketing budget.

When you stop marketing your application, communication between your target audience and your startup ceases. This leaves consumers in the dark about your startup and your new product. Also, they’ll abandon your brand if they already know of your product.

Now you have an understanding of what a dedicated software development team entails and some case studies of its application. It doesn’t end there.

The illustration shows the main reasons not to hire a dedicated development team

What’s Next?

Getting the right expertise is essential for creating a unique product. To achieve this aim, startups are often torn between hiring full-time developers and outsourcing for their business needs.

This article guides you on what is a dedicated software development team. But that’s not all. To have in-depth knowledge about hiring effectively, read this article on how to hire a dedicated team of software developers.

Read More

How to Hire a Dedicated Software Development Team? An Actionable Guide

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