The concept of a dedicated development team is a prevalent partnership model in software development, facilitating remote collaboration with clients. Opting for a dedicated development team is a favorable decision for both established corporations and emerging startups.
In this article, I will elucidate the dedicated team model, its advantages and drawbacks, and how it contrasts with alternative team structures. I will also offer insights into determining the appropriate circumstances for hiring a dedicated development team versus exploring other alternatives.
The dedicated team model is a collaborative framework involving an outsourced team of developers, engaging in long-term cooperation with a client. This stands as one of the most prevalent collaboration models, on par with the fixed price and time & material models. By enlisting a dedicated team, you gain access to a group of experts meticulously tailored to your business objectives. This setup resembles an internal team, though the developers remain technically external. Diverging from employing regular staff, the dedicated team model absolves you of administrative, HR, tax, and benefits responsibilities. Instead, you can channel your attention towards higher-level business concerns while your development partners manage the rest.
To sum up, the dedicated team model delivers a meticulously chosen professional team dedicated to realizing a specific project, all while handling administrative expenses on their end.
The precise composition of your dedicated team hinges on your business requirements. Consequently, your development team might encompass:
Front-end and back-end specialists, full-stack engineers, and mobile developers.
UX/UI designers.
DevOps engineers.
Quality assurance experts.
Business analysts.
Product managers.
Project managers.
....
The dedicated team model is sometimes misconstrued with the fixed price model. However, these two models cater to distinct business needs. The fixed price model entails a client paying a predetermined sum, regardless of work hours or completed tasks. This format suits short-term projects with well-defined requirements and scopes of work.
A drawback of the fixed price model is the potential for overpayment from the perspective of a co-founder. Accurately predicting time and scope of work might prove challenging. Nevertheless, the agreed-upon amount must be paid, even if the project hasn't been fully executed.
The fixed price model is suitable for:
Projects with clear deadlines.
Well-defined specifications.
Short-term ventures.
Projects with minimal anticipated changes.
MVP development.
In contrast, the dedicated team model offers flexibility and developmental freedom without incurring overpayment.
The dedicated team model suits complex, long-term projects with growth potential. It's particularly fitting when your idea lacks product-market fit and requires a discovery phase.
For burgeoning startups with growth aspirations, considering a dedicated development team is prudent. This approach facilitates swift team formation, cost-effective hiring, and accelerated product development. While your in-house team focuses on business-oriented tasks, the augmented team handles supplementary work.
When your idea lacks product-market fit and necessitates a discovery stage, the dedicated team model is ideal. The discovery stage lays the groundwork for project development and might entail months of testing and interviews. The dedicated team setup affords time and resources for thorough exploration, free from financial concerns.
Complex, long-term projects poised for expansion benefit from the dedicated team model. Startups transitioning beyond the pre-seed stage, aiming for rapid growth, can leverage a dedicated development team. This approach minimizes hiring and firing costs, grants access to global professional developers, and supports rapid product scaling.
Notably, successful tech giants like WhatsApp adopted a dedicated team of developers to enhance their iOS app. Other companies embracing this model include Apple, Oracle, American Express, IBM, Verizon, Amazon, ...
As highlighted in the 2020 Global Outsourcing Survey report by Deloitte, a predominant reason (70%) for outsourcing is cost reduction. Opting to hire a dedicated development team also presents cost-cutting advantages, and here's how.
The pricing structure within a dedicated team is straightforward. Upon assembling a team, each member is assigned a specific hourly rate, and you pay for the hours worked. This essentially constitutes the primary expense. There are no additional outlays for office space rental, equipment procurement, taxes, utility bills, etc.
Furthermore, hiring a Dedicated software development team is both more cost-effective and efficient compared to sourcing each professional independently through an HR team.
In summary, a dedicated team proves most suitable for projects characterized by ambiguous requirements, such as emerging startups and evolving tech ventures. For these enterprises seeking enduring partnerships, the dedicated model presents an optimal blend of cost-effectiveness and a curated professional team. Armed with this insight, you can make an informed decision about whether to engage a dedicated development team.
Should any doubts persist regarding the most suitable collaboration model, feel free to reach out to us. We'll assist in selecting the approach that best aligns with your requirements.
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