Today, many companies recognize the need to hire a team of professionals to tackle specific tasks that their in-house team cannot handle. Often, employers will contact an outsourcing company to access these professionals. But outsourcing companies offer different business models for outsourcing professionals. So, which model should you use?
For software development, the dedicated team model is the go-to approach for outsourcing work. What is a dedicated team? How does it work, and what does it cost? Most importantly, how does it compare with the other business models? This article is the ultimate guide to dedicated software development teams.
What is a dedicated team model?
A dedicated team is a business model where an outsourcing company provides a client with a group of IT professionals to complete a specific project. The outsourcing company selects specialists who have the skills to meet the demands of the client. Often, a Dedicated Team model is used for long-term projects where the requirements aren’t clearly defined. During this period, the software developers do not work on anything else; they focus entirely on the client's project. That's where the name "Dedicated Team" comes from.
The developers commit and dedicate themselves to the client's project, almost as though they were in-house team members. There are two ways to manage a dedicated team. Firstly, a client can decide to manage the team him/herself. Even though the developers are technically employees of the outsourcing company, a client may choose to see them as an extension of his team and communicate directly with them. Alternatively, the client can leave the responsibility of team management in the hands of the outsourcing company’s project manager.
The project manager will liaise between the client and the development team to ensure that their expectations are met. While the second method isn't wrong, you'll generally achieve more if you can treat your dedicated team as a natural extension of your in-house team; you can think of them as the remote wing of your team.
Even where a client chooses to manage the team, they will only be managing workflow and assessing the team's performance. All administrative duties still lie with the outsourcing company. This allows you to focus all your attention on the project. In software development, a dedicated team can include any of these roles:
- Front-end and back-end developers
- UX designers
- DevOps engineers
- Quality Assurance Engineers
- Business analysts
- Project managers
As I mentioned earlier, the makeup of the dedicated team is dependent on the client's needs. So, let's say the client doesn't require a business analyst; there’s no need to include one on the dedicated team.
What does a dedicated team mean in terms of scope, time, and cost?
Before you contact an outsourcing company to hire a dedicated team, you need to know what you're getting into. You need to know what a dedicated team means in terms of scope, time, and cost.
The Scope of a Dedicated Team:
When it comes to scope, there are no fixed requirements. This is because the dedicated team model is the most flexible of all the business models. It’s up to the client to determine which aspects of the project will be handled by the dedicated team and how deeply they will be involved in project matters. This level of flexibility makes it easy to change things during the course of the project without destabilizing the team and their workflow.
Here, also, the flexibility of a dedicated team becomes apparent. Dedicated teams are hired for specific projects or periods, so there’s no fixed rule regarding how long a dedicated team can stay with a client. It is the client’s prerogative to determine how long he anticipates the project to last. Sometimes, a client may enjoy working with the team so much that they request the same team for future projects.
When it comes to pricing, the dedicated team model is very simple and straightforward. Usually, clients will make monthly payments just as they would for their in-house team. The amount comprises the team members' monthly salaries and administrative overheads, which will be paid to the outsourcing company.
Dedicated Team vs. Time and Materials Model
We already know what a dedicated team model is. Before we begin to compare the two business models, let's find out a little bit about the time and materials method. The time and materials model is different from the dedicated team model in that the cost is based on the number of resources and the total time that developers invest in your project. It’s the best model to use when you can’t put a fixed price on the effort that will go into the project. It’s relatively flexible because both clients and service providers know that the estimated cost may differ from the actual cost.
- In the dedicated team model, payment is based on an amount agreed upon at the beginning of the project. Usually, payments are made monthly. The time and materials model has a different arrangement. Here, the amount is based on how much time the developers spend on the work. The rates are often on an hourly, daily, or weekly basis.
- The dedicated team model gives you greater budget control, but the time and materials model is unpredictable because the overall cost can far exceed the expected budget.
- The dedicated team model is ideal for large, long-term projects. For such projects, it's convenient to have a team whose entire focus is on achieving one goal. The time and material model, on the other hand, is better suited to medium-scale projects which will not last too long. It's possible to use the time and material method for larger projects, but you'll probably not be so happy with the cost.
- A dedicated team offers a lot more flexibility than the time and materials method. The members of a dedicated team are paid on a monthly basis so clients can feel free to make changes and change requirements as the project progresses. There’s no worry about incurring extra costs. In a time and material method, a client may be more hesitant to introduce changes because every change means that the project will take a longer time to finish. And that, in turn, means a higher cost for the client.
- A dedicated team model doesn’t have fixed requirements. On the contrary, a time and material model needs to have clearly defined requirements and expectations. If you don’t clearly state the requirements for your project, you may have to make several adjustments along the line. And of course, more adjustments are equal to more money.
Dedicated team vs. Fixed-price
The fixed-price model is one where the client and the service provider agree on the scope, time, and cost of the project ahead of time. If you have a project that has a clear goal and an already determined deadline, then the fixed-price model is your best bet.
- The dedicated team and the fixed-price models are similar because they are both clear and definitive. The client knows what he's getting, how much it will cost him when to pay, and whom to pay.
- Unlike a dedicated team, the fixed-price team offers very little flexibility and room for adjustment. Because everything is determined ahead of time, you cannot easily change the product requirements. Indeed, making changes while using the fixed-price method can be so complicated that it can even affect the business relationship.
- A dedicated team model is suitable for large, long-term projects with requirements that are not clearly defined. The fixed-price model is almost the exact opposite. It is ideal for smaller-scale, long-term projects where the requirements are rigid and predictable.
When the dedicated team model is a good choice
With three business model options available, you may be confused about using the dedicated team model and when it's advisable to use a different model. Here's a guide to help you know when the dedicated team model is a good choice:
- Use the dedicated team model when you have a large, long-term project with rapidly evolving scopes and requirements.
- Use this model if you want to have total control over resources and workflow.
- If you want to focus on your project without the distraction of administrative tasks, then use the dedicated team model.
- The dedicated team model removes geographical limitations. You should use this method if you want to access some of the best talents from across the globe.
- Use this method to fill in knowledge and expertise gaps in your team without necessarily hiring more in-house members.
In this article, we have provided the most vital information about dedicated teams in software development. The bottom line is this; dedicated teams are perfect for dynamic projects with changing tasks and requirements. It's an excellent way for companies to make up for the lack of specific skills and expertise in their in-house team.
We are confident that this article has been helpful and informative. Please take a moment to share this post and leave a comment below.
Here at Cloud Employee, we assist companies looking to hire dedicated offshore developers across many technologies. Talk to us, learn more how Cloud Employee works, or see our Developer Pricing Guide.
Importance Of Technology Advancement In Business Sector
Download Our Developer Pricing Guide
We did an analysis on the difference between western and Philippines developer salaries. Uk, USA and Australia pricing comparisons available.Download