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A dedicated team is a partnership model widely used in software development for remote collaboration with a client. Transparent and effective, this model is the best choice for both well-established companies and growing startups.
This article explains what a dedicated team model is, its pros and cons, and how it differs from its counterparts – fixed price and time & material frameworks. It will also cover where the dedicated team model works and how the Uptech team uses it to bring out the best experience.
What is a dedicated team model?
A dedicated team is a collaboration model with an outsourced team of developers, where a client and a developers’ team collaborate on a long-term basis. This is one of the most popular collaboration modes, which stands on par with the fixed price (FP) and time & material (T&M) models.
If you choose to collaborate within a dedicated team, you get a team of professionals selected specifically for your business goals. This team resembles an in-house team, who are technically your employees.
However, unlike employees, you do not have to bother about administrative, HR, tax, and social benefits’ issues with a dedicated team.
On the contrary, you can focus on more high-level business issues while your development partners do the rest.
What is the cost of hiring a dedicated team?
The pricing model in a dedicated team is quite simple. Each employee has a specific hourly rate, and you pay for the number of hours worked. The overall amount of your payment covers the following expenses:
- Office support;
- Recruiting and HR services;
- Education, societal and personal benefits.
The specific composition of your dedicated team depends on your business requirements. Depending on your business goals, your dedicated team may consist of:
- Front-end and back-end, full-stack engineers, mobile developers;
- UX/UI designers;
- DevOps engineers;
- Quality assurance specialists;
- Business analysts;
- Product managers;
- Project managers.
Let’s imagine a situation. For the discovery stage of your project, you need the following specialists: a business Analyst, a UX/UI Designer and a Product Manager. Let’s say a rate for each is $50 per hour and each clocks a total of 160 business hours per month. Thus, engaging three specialists for the discovery stage will cost $24K.
Dedicated Team vs Fixed Price Model
The fixed price collaboration model is a framework where a client pays an agreed amount of money regardless of the hours worked or job done. This mode best suits the short-term projects with strictly determined requirements and scope of work.
The main pitfall of the fixed price model is the risk of overpayment. Sometimes you cannot precisely forecast the time and scope of work. At any rate, you will have to pay the amount as agreed in the fixed price contract, even though the job may not have been delivered.
The fixed price model will work for:
- Projects with clear deadlines;
- Determined specification;
- Short - term projects;
- When there are no changes planned;
- MVP development.
Unlike fixed-price models, the dedicated team format allows for as much freedom and space for development as you need without overpayment.
Dedicated Team vs Time&Material Model
In the Time&Material model a client pays for the actual time and efforts of the team spent while developing a specific feature.
This collaboration model is thus suitable for:
- Projects where requirements can change;
- The market is not thoroughly explored;
- Product market fit is yet to be determined.
While the Time&Material model also gives you the space needed for in-depth research and development, it does not guarantee that you'll work with the same team throughout the project. If some specialist does not have enough tasks on your project, he/she can be appointed to some other project.
Meanwhile, in the dedicated team model, you have an exclusively dedicated team for your project that is not obligated to take up other assignments. Well, this is what makes such a team “dedicated”.
When Is a Dedicated Team Your Best Choice?
The dedicated team model is suitable for complex long-term projects, which can expand in the future. When your idea does not have the product-market fit and needs a discovery stage, the dedicated team is the way to go.
Vague Project Requirements
The truth is you do not need to have the whole concept of a product figured out to kick off. Professional product managers and business analytics can do the discovery stage to validate your idea, find the product’s market fit, and build its MVP version as the project moves on.
The discovery stage lays the backbone for the whole development mechanism of the project. Yet, it may take months of tests and interviews to finally settle down. The dedicated team model provides time and resources for you to focus on the discovery stage with no fear of overspending.
To unveil your project’s potential, you need a strong team of developers to support you along the way. Within a dedicated team, you can rest assured that the people you start working with will follow through to the end of the project.
As surprising as it is, almost any company on the big tech list leverage the dedicated team model. Take WhatsApp for example. The globally known chat app now and then leverages the power of outsourced development. For example, the company hired a dedicated team of developers for its iOS app.
Slack comes next in the row. Few people know that the web interface, mobile app and marketing are fully made by an outsourced team. Among other companies using the dedicated team approach are Apple, Oracle, American Express, IBM, Verizon, Amazon, Doist, Automatic, Buffer and 10up.
When You Should NOT Use the Dedicated Team Model?
Despite the obvious perks, the dedicated team model is not a one-size-fits-all approach. Here is a list of situations where the dedicated team collaboration model is not the best option:
Short and Middle-Term Projects
You do not need a dedicated and involved team for small projects with clear and defined requirements. When the work scope is strictly outlined, you need a group of people to execute the tasks set. In such a case, a fixed price model is perfect for short term projects, while the Time&Material approach is right for middle-term enterprises.
Limited Time & Budget
When your budget for a project is strictly fixed, opting for a dedicated team model is not the best idea. Sometimes you just do not need a full-time designer or a project manager. In this case, a fixed-price model is more than sufficient to deliver the necessary result.
How Does Dedicated Team Collaboration with Uptech Work?
Uptech team has a broad experience of collaboration with a client within a dedicated team contract. About 25% of the projects we start every year are based on the dedicated team model. Moreover, 25% of projects started with other business models eventually switched to the dedicated team.
Here's how we usually start a new dedicated team project:
- Scope estimation. At this phase, we figure out how much work is expected to be done and how many people need to be involved.
For that, a business analyst communicates with a client to figure out his/her needs and wants. Based on that information, business analysts define the project's requirements and determine the project's scope.
There are two possible scenarios in the scope determination: when a client has a predetermined scope, and when he/she does not.
- When the client has a predefined scope, we'll discuss the budget with the client by considering the priorities and estimated or given timelines.
- If the client doesn't know the exact scope, we can carry out a discovery stage where we make hypotheses and test them with prototypes' help.
Based on the test results, we analyze whether the existing scope reflects our objectives. If not, we proceed with further discovery and research until we find the needed scope.
- Talent selection. At this stage, we put together a team of skilled and motivated professionals to work on your project. Here are the criteria that we use for selection:
- Profitability - estimated ROI for this project;
- Quality & Service - that Uptech team has the skills and experience to deliver high-quality product and Service;
- Skills Development - the opportunity for the team member to develop skills in the project;
- Morale & Motivation - the psychological conditions to work in this project.
- Scope call. At this call, we discuss the purposes, milestones, and priorities for the client's first sprint.
- Proposition call, where we present a suggested solution, expected team composition, timelines, budget, plan additional research activities, if necessary.
- Kick-off call. This is the point where the team is given the go-ahead, and the project launches. The call's purpose is to meet the team (client team and Uptech), discuss who will do what, receive access to the development tools, align the project and business priorities, and set up check-ins.
A dedicated team is the best option for projects with many vague requirements: aspiring startups and evolving tech businesses. For such enterprises, who seek long-term collaboration, the dedicated partnership comes as the best fit in terms of optimal cost and selected professionals on the team.
If you have doubts about what kind of collaboration model will suit you best, get in touch with us, and we will choose the approach which matches your requirements.