A dedicated development team is a partnership model widely used in software development for remote collaboration with a client. Hiring dedicated development team is the best choice for both well-established companies and growing startups.
Uptech – is an international dedicated development team. We have been helping startups and established business to develop products that matter for 7 years. We developed apps for eCommerce companies like Dollar Shave Club and GOAT. We have been working with clients from the fintech industry, like Aspiration, for 6 years, and we treat their product as our own. This is what we mean by dedication.
In this article, I’ll explain what a dedicated team model is, its pros and cons, and how it differs from other team formats. I’ll also share some tips on when to hire dedicated development team, and when it’s better to look for other options.
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What is 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 models, which stands on par with the fixed price (FP) and time & material (T&M) models.
When you hire dedicated teams, you get a team of professionals selected specifically for your business goals. This model resembles an in-house team, who are technically your employees.
However, unlike with employees, in a dedicated team you don’t to bother about administrative, HR, tax, and social benefits issues. On the contrary, you can focus on more high-level business issues while your development partners do the rest.
To sum up, a dedicated team model provides you with a hand-selected professional team that is focused on realizing one specific project. Plus, all the administrative expenses are on their side.
Who is in a Dedicated team?
The specific composition of your team depends on your business requirements. Thus, your development 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.
Dedicated Development Team vs Fixed Price Model
It is often the case that a dedicated team model is confused with the fixed price format. Yet, these two forms match way different business needs.
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 from a cofounder’s perspective 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 contract, even though the job may not have been delivered.
The fixed price will work for:
- Projects with clear deadlines;
- Determined specification;
- Short - term projects;
- When there are no changes planned;
- MVP development.
Unlike fixed contracts, the dedicated team format allows for as much freedom and space for development as you need without overpayment.
Dedicated team vs Time&Material model
Another format that usually competes with the dedicated team is the Time&Material. In the latter 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 doesn’t guarantee that you'll work with the same team throughout the project. If some specialists don’t have enough tasks on your project, they can be appointed to some other project.
Meanwhile, the advantage of a dedicated team model is in its dedication. When you hire dedicated development team, you get 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”.
3 Signs That You Should Hire Dedicated Development Team
The dedicated team model is suitable for complex long-term projects, which have potential to expand. When your idea doesn’t have the product-market fit and needs a discovery stage, the dedicated team is the way to go.
Early-stage Startups
If you’re an early-stage startup and you’re expected to grow, think of the idea to hire dedicated development team. It’ll let you build a team quickly, save money on the hiring processes and develop the product faster. While your in-house team is left to work on business-oriented tasks, the augmented team does the additional work.
Projects with vague requirements
When your idea doesn’t have the product-market fit and needs a discovery stage, the dedicated team is the way to go. As the discovery stage lays the backbone for the whole development mechanism of the project, 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.
Long-term projects
The dedicated team model is suitable for complex long-term projects, which have the potential to expand. Startups that pass the pre-seed stage and need to grow fast can benefit from hiring a dedicated development team. Within a dedicated team, you will save up hiring/firing expenses, get access to professional developers worldwide, and will be able to scale the product fast.
On top of that, let’s take a quick look at such tech giants as WhatsApp. They hired a dedicated team of developers to help them with iOS app. Among other companies using the dedicated team approach are Apple, Oracle, American Express, IBM, Verizon, Amazon, Doist, Automatic, Buffer and 10up.
Here’s a quick guide on how to find app developers.
Check it out!
3 Signs That You Should NOT Use 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 when out of two choices to hire or not to hire dedicated development team, I advice to pick the latter.
Short and Middle-Term Projects
You don’t need to hire dedicated development teams 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 and Budget
When your budget for a project is strictly fixed, opting for a dedicated team model is not the best idea. Sometimes you just don’t 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.
The project scope is fully defined
When you have a strict plan of execution for your project, all features are figured out, and there is no place for compromise, you will want to avoid hiring a dedicated development team. Depending on the scale of the project, you should settle on either fixed-price or Time&Material models.
How much does hiring dedicated development team cost?
According to the 2020 Global Outsourcing Survey report by Deloitte the top reason (70%) to outsource is cutting costs. Hiring a dedicated development team also gives the cost reduction benefit and here’s how.
The pricing model in a dedicated team is quite simple. Since hiring a team, each employee has a specific hourly rate, and you pay for the number of hours worked. This is basically the one thing you pay for. No extra expenses on renting an office for a team, getting equipment, taxes, paying electricity bills, etc.
In addition, it’s much cheaper and faster to hire a Dedicated software development team than to search for each professional independently with HR team.
Why Uptech is a Good Choice While Hiring Dedicated Development Team?
Uptech team has a broad experience of collaboration with a client within a dedicated development 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.
Dedicated Development Collaboration: Uptech Process
Here's what happens when a client hires us as a dedicated development team:
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 analysts 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:
- The client has a predefined scope. We'll discuss the budget with the client by considering the priorities and estimated or given timelines.
- 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
At this stage, 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 gets a green light and the collaboration starts.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.
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Conclusion
To sum up, 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. With that in mind, you can decide for yourself whether you need to hire a dedicated development team.
But if you still have doubts about what kind of collaboration model will suit you best, feel free to get in touch with us. We will choose the approach which matches your requirements.