How Outsourcing the Hiring of a Dedicated Software Development Team Can Help your Startup Growth
With the advent of technology, time and resources have become more precious than ever in today’s business world. Companies are looking to save money wherever possible, and one way they have been doing that is by outsourcing software development to Dedicated Software Development Team.
A common model when outsourcing software development is dedicated teams that become an extension of your organization and only focus on your development requirements. By choosing the dedicated team outsourcing model, you hire an already formed team that integrates into your existing IT department processes and is fully dedicated to your project but remains self-managed. It is a suitable option if you have a well-established development team but need an additional development force for long-term cooperation without the hassle of hiring and managing. These software development teams can be used to provide any organization with the best-quality solutions in terms of cost-effectiveness, flexibility, and speed. However, many companies still do not fully understand the benefits of hiring a dedicated software development team or do not know how they can benefit from using this type of development platform.
Outsourcing typically means the development team is hired, managed, and paid by a third-party service company. The organization hires the service company on a contractual basis versus hiring, managing, and paying developers as direct employees (W-2 employees). These developer employees typically work inside the company’s office or remotely versus the outsourced development team that works in the third-party service company’s office or remotely.
Which is more lucrative and valuable: hiring a dedicated team of programmers or your in-house employees? We have put together all the pros and cons so you can find an answer and apply it to a future startup project.
Pros for employee developers
No language/cultural boundaries
It is a team of professionals probably from the same country/city as you, with the same cultural and linguistic backgrounds, who work within the same organization. This makes workload management easier and promotes better collaboration between employees.
What are the advantages of hiring an internal team? Fewer borders and limitations, face-to-face communications, the same time zones, and as a result, a better understanding of what to do.
However, technologies like Slack, Jira, etc., and COVID force companies to adapt to remote working. This has dimensioned this benefit quite a bit.
It enables you to maximize the customization of the internal engineering process for every minor technology need in your business. You can easily make the appropriate changes to the development process to make the project fit your business.
In-house specialists master their skills in building the project you started and quickly became professionals of the highest level with a narrow focus. This reduces errors and means that support will be efficient and straightforward and that your company has sufficient skills to maintain the product independently.
Cons for employee developers
Large price tag
Hiring developers as direct employees is typically 2 – 3x more if you factor in taxes, employee benefits, training, and management.
Dismissal of staff
One of the most significant risks in in-house software development is laying off employees. Once companies have invested considerable resources in their adaptation, they may disappear, and you will have to invest in new team members again.
Ability to rapidly change development
Third parties are constantly interviewing candidates and have a wide range of resources.
Lack of experience in different areas
There is another classic problem with an internal pool of candidates. You will need to hire a particular candidate and restart hiring to apply specific skills. The same is true in the case of project expansion. If the employee works full time in the company, he will have to pay the costs of insurance, premises, equipment, vacations, etc.
Lack of experience with SDLC also results in poor hires or unnecessary resources being hired. Using a third-party service provider with extensive experience working on many projects will often be better equipped to identify the appropriate resources).
What is a dedicated team?
There are different teams in IT, but a dedicated team differs in goal setting, thus affecting team building technology.
A dedicated team is entirely focused on the project, and a client controls the work process and has the flexibility to focus on more complex tasks.
A dedicated team is a cooperation model between a customer and the service provider. With a dedicated software development team, a client has a team of specialists who are selected based on the requirements of a project. The effectiveness of the team and the KPIs of each specialist are periodically verified, and adjustments are made to the workflow. This approach is crucial for a startup project because it is wholly dedicated to it at any stage of development.
When should a dedicated software development team be considered?
- Focus on long-term cooperation.
- When cost-effectiveness, flexibility, and speed are concern
- Increase the team even more.
- When there is a lack of time/desire/resources to manage/build your team.
Clients choose dedicated programmers when they need to increase team size within the company but don’t have the time or desire to hire new specialists.
Dedicated software development team structure
The team consists of a project manager or technical team leader and 1 to 3 engineers. To choose the best equipment for your project, there are several steps:
1. Analysis of customer needs to provide developers with the necessary information about the project. That consists of:
• definition of infrastructure and needs for dedicated developers
• definition of the scope of work and tasks to be performed by a dedicated team
2. Drafting a contract with information on the conditions, costs, and agreements of a project.
3. Form a dedicated team, including selecting developers and providing them with the necessary equipment.
It is essential to create an atmosphere of certainty among employees. Employees need to understand what they are responsible for and what should not be resolved without coordination with a manager. Feedback is critical to the individual and the team.
How do we determine payment for this team?
The services of a dedicated team are paid monthly. The price is quite simple: the amount depends on the composition and size of a team and the skills of the specialists.
Dedicated software development team vs. internal team
Projects now require close contact from the development team with managers, marketers, business analysts, and constant feedback from users.
What equipment is better to choose for a project? Compare the two options: internal team and dedicated team.
A dedicated team performs the work according to the tasks specified by a client, who controls the workflow, while the team only dedicates itself to their project. A client can hire and fire employees and regulate a team’s workload.
An internal team is a model in which the company has its specialists and adapts them to the project tasks.
By choosing a team model dedicated to your project, you gain complete control over your work.
7 Key Benefits of hiring dedicated teams for a startup
As an in-house software development team, dedicated specialists have a significant advantage: the transparency of the communication process. You can fully control your specialists, assign them a schedule that suits you, and distribute tasks among them. Constant feedback allows you to consider all customer requirements and comments and make any necessary changes over time.
The dedicated team’s benefits are excellent on long and complex projects, while in-house specialists are suitable for small projects.
- DT has more to do with personality. By hiring a dedicated team, most clients are not only looking for additional resources for testing. They are also looking for motivated and interested project specialists who will be proactive and strive to perfect the final product. Full participation in the project requirements and methodology achieves the desired result.
- DT is frequently used for long-term projects. The project gains value thanks to the accumulation of experience and the preservation of knowledge. Programmers study a project in detail and spend all their time on it.
- The transparency of the process is possible thanks to the constant presence of close specialists; the specialists do not have other projects and are only involved in the specified work.
- The ability to monitor work progress is also closely related to transparency. A team leader continuously reports on the development phases. Remote developers are more challenging to control in such a case.
- You can adjust the operating time according to the customer’s time zone.
- DT allows you to quickly build a team if necessary because the departments that offer this type of equipment always have the essential developers.
- Detailed reports and ongoing collaboration significantly impact the quality of the work output.
Another benefit of a culture built around teams is that you can foster a strong sense of teamwork through your employees. You may need a professional team on hand to handle some of the larger tasks for your business. However, you can also hire individuals to handle the smaller daily tasks. When you work with a dedicated business team, you have employees that know that they will be fully supported and paid accordingly. This can lead to more excellent employee retention, better productivity, and a stronger bond between team members.
One of the most significant pros of the dedicated team model is that it can help you make a positive difference in your business. You can develop a company that focuses on the future instead of just the here and now. When you have a dedicated team that works hard to improve your operations and customer service levels, you can rest easy knowing that your business runs as smoothly and effectively as possible. The entire staff knows that they are appreciated and valued.
To compare, there are several disadvantages to a dedicated team:
• Task scheduling and employee loading and associated risks are on the client-side. The client is obliged to pay developers even if the specialist has completed the task ahead of time or if there are no tasks for a while.
Will a dedicated software development team help you win your business?
You can use these outsourced professionals’ knowledge, experience, and expertise. You can also save a great deal of money if you work with this outsourcing model. The growing popularity of hiring a dedicated software development team can be easily understood when these factors are considered. It is a model that will become more relevant and used as remote work becomes the norm.
It is also essential for the dedicated development professionals of a team to understand the current project work scope and constraints. The project manager needs to be aware of the software limitations and the business constraints that will affect the project. This understanding can then translate into additional effort to deal with these issues and enable the team to deliver the most cost-effective result possible. When a team is successful at providing the result, they can offer a competitive advantage to their organization and contribute positively to the overall business performance.
The primary aim of a dedicated software development team is to ensure that all the functionality required by the enterprise is provided. Once the developers have delivered an efficient solution to the customer, they can leave the project and return to their home environment. In addition to producing the profits from the project to the enterprise, this is also helpful in increasing the number of jobs within the organization. The size of the dedicated software development team is mainly dependent upon the size of the project.
With all these functions in place, the IT team can be expected to deliver quality software products to their clients. The methods used in the delivery process are also based on the methodology followed by the company. For instance, an IT team might work on building a custom website for a client based on the company’s current standards designed to ensure the best possible user experience.
How do you get the best results from your dedicated development team?
Of course, the responsibility for getting results rests with the dedicated software development team. But if things don’t go according to plan, it can hurt your business and theirs. Here’s what you can do to make sure that doesn’t happen and that you get the best results:
- Invest in team-building by fostering a healthy work culture and strong ties with your virtual software development team.
- Receive regular, weekly, or even daily updates to ensure everyone is on the same page and the project stays on track.
- Celebrate milestones and appreciate a job well done.
- Interact with your dedicated software development team personally by providing opportunities for them to unwind. Perhaps you can organize a team lunch or outing to celebrate a milestone in the project.
How do you recruit a dedicated software development team and sign a win-win contract?
These are the critical aspects that the contract must cover to protect your business against potential risks:
- Sanctions in case of breach of the terms of the agreement by one of the parties;
- Liability clauses that define the limits of liability for you and your partner;
- Warranty clauses that guarantee a certain level of quality of the services provided by your provider;
- Notification periods: deadlines for project initiation, as well as for scaling up and downsizing a team.
- Inaccurate reporting periods can affect project execution and delivery;
- Data protection rules, including de-identification, re-identification, and anonymity of data;
- Customer ownership of the code, when the code is delivered and paid for;
- Agree on applicable law if the contract is international.
- Your outsourcing partner will want to mitigate potential risks as well, so here are some standard points they’ll include in the contract:
- Strict deadlines for issuing an invoice and paying an invoice and the penalties provided for missed payments;
- Non-solicitation clauses prohibit looking to your outsourced developers for your local team.
Managing your own dedicated software development team is no easy feat, so we’ve put together tips to help you out.
The decision to hire a dedicated development team gives you the double benefit of taking advantage of highly qualified services at a low cost. This model works well for long, short, and one-off projects. However, to get the most out of it, companies must understand recruiting and collaborating with their outsourced teams.
Hiring a dedicated development team allows you to focus on your critical areas of expertise. At the same time, the dedicated team helps you develop technologically with full attention to the project you are working on.
At Novateus, we guarantee impeccable quality from the start. From evaluating your business objectives to solving problems before developing solutions, our experts bring your ideas to life and provide you with superior expertise.
To discuss your ideas and get in touch with our experts, leave a comment.
Hopefully, after reading this, you too can begin to see the benefits of hiring a dedicated development team. Find out what we can do for you, and contact us to schedule a call. If you enjoyed reading this article about the dedicated development team, check out our other articles.