How to Hire a Dedicated Development Team [2023 Guide]

Main Thoughts

• Hiring a dedicated software development team has many benefits, such as flexibility, cost-effectiveness, quality, and access to global talent pools.
• However, there are some risks associated with hiring a dedicated development team, such as the risk of lower software quality, security issues, a lack of communication, and a lack of control over the development process.
• To mitigate the risks, it is important to do your research and find a reliable software development company to partner with.
• It requires a high level of trust, communication, and collaboration between you and your partner.
• Some tips for finding a reliable software development team include:
• Make sure the company has a good track record of successfully completing projects.
• Get references from previous clients.
• Make sure the company has a clear understanding of your project’s requirements.
• Be clear about your budget and expectations.

Video summary

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What Is a Dedicated Development Team?

It is an outsourced team of developers who work with a client on a long-term basis. This team of professionals is assembled for your specific business needs, shares a lot of similarities with your in-house teams, and, basically, becomes part of your company during your project’s implementation.

It is a big challenge to find a dedicated development team to fulfill your business vision within a strict timeline and budget. Usually, mid-sized businesses and enterprises hire a dedicated software development team to create new products or implement technical tasks in which they themselves lack experience. We at SPD Technology have been helping companies by providing them with dedicated teams for more than 16 years and continue to gain more experience in this area. If you are the CTO, CEO, or Chief of Innovations of a startup or product development company, you may find this article useful, as we share our thoughts on adding remote experts to your project. SPD Technology has successfully adjusted to the demands of the COVID-19 restrictions and continues to deliver great software solutions to clients worldwide.

When Do You Need a Dedicated Development Team

There are multiple scenarios when custom software development teams can be beneficial and capable of truly making a difference. The good news is that both small startups and well-established enterprises can find good use of a dedicated team. Here are some scenarios for you to consider that might resonate with your situation.

A startup that requires quick product development from scratch

If you are creating your first MVP and looking for proficient experts, the Dedicated Team model could save the day. With a dedicated team, you will not have to spend any additional money on recruitment activities, renting an office, or buying additional equipment the way it happens with your in-house software development department. The bottom line is that local talent is more expensive, and you could also waste a lot of valuable time trying to find the experts you need locally. If you choose the Dedicated Team approach, you will only pay for what you need, which is perfect for a startup environment.

A new tech company in need of additional expertise

Here, the Dedicated Team model can offer a quick extension of your development capabilities with more experts, which will offer a young tech company an opportunity to get clients and start operating. Just like with startups, you will pay for your dedicated team only when you use its services, and be spared any recruitment or infrastructure-related expenses.

A tech company working on a big project

Plans may change on the fly, which is a common thing for enterprises that create products with the help of multiple tech companies. If you represent a tech company and enterprise, you create a product that needs more workforce, the Dedicated Team model can’t be very useful. It can help you earn more and get better contracts from your software provider. The speed in this scenario is crucial, and adding a dedicated team of engineers is a good idea.

An organization in need of tapping into a new technology

Any company can be in a situation when the existing tech expertise does not match their business needs anymore, or when they want to enter new industries. Adding a dedicated team to the mix will solve this problem and provide just as many tech experts in the new field, as required. This approach will give you access to the global talent pool, so that you will be able to assemble a dedicated team with those engineers, who are not available locally. This is especially important for cutting-edge technologies like Artificial Intelligence and Machine Learning because the experts one needs might simply not be available anywhere near your region, and a dedicated team may be the only way to fix the situation.

In all the above scenarios, dedicated software development can bring tangible benefits to organizations. It will be a good idea to consult an experienced IT provider to find out how exactly dedicated software development can help in your specific situation because each case is unique and more effective alternatives may appear after some analysis.

Options to Hire a Software Development Team

We live in unprecedented times when the world is trying to adapt to the new normal. Many businesses had experienced a screeching halt in their growth as a result of the COVID-19 pandemic, some have incurred significant financial losses, and some have closed their operations. It is safe to say that all organizations have suffered, and we are still not fully aware of the extent of these events to the global economy. Businesses are forced to work remotely and outsource their jobs to survive. According to the Capital Counselor, the IT industry is a leader in outsourcing and accounts for some 50% of the global outsourcing market.

Technavio predicts that in the next 4 years the IT outsourcing market will be growing at a 5% rate and reach almost $500B. What does that mean for your business? How to find a dedicated development team for your project? What cooperation model will help you achieve your goals? This article will provide answers to these questions and more, but let’s start with the basics.

What is the structure of a software development team?

Here is how the typical team might look:

Key software development team roles include:

• The Project Manager (PM) is in charge of planning and execution, overseeing all processes, delegating tasks among the software developers in a team, and communicating with the client.
• Business Analysts (BA) are responsible for analyzing and documenting the client company’s business processes and collecting and refining the requirements for the solution to be developed. In some of SPD Technology’s projects, our clients delegate the task of creating project requirements to our Business Analysts. Therefore, the client sets only high-level business goals.
• Designers are in charge of how the product will look and how users will interact with it.
• Software developers do the actual heavy lifting by writing the code. Front-end engineers are focused on the customer-facing part of the product, while back-end engineers take care of the elements that users can’t see.
• Quality Assurance Engineers (QA) test the product to make sure it meets the set requirements.

Other important roles that could be required in a project:

• Tech Lead is often the most skilled among the software engineers in the development team. They are responsible for the technical decision-making on the part of the team.
• The Team Lead is a technical expert too, but with a focus on the management process.
• Solution Architect creates the architecture solutions for all the teams involved in implementing the project. This expert also oversees the entirety of the development process.

Local product development teams

Having your entire team in-house is a great option. There is a great chance that most of your team members will speak the same language and have similar backgrounds and beliefs. This cultural fit is definitely a plus for a project. It will help newcomers integrate faster into your development processes.

The second main advantage is that having the entire team available on-site helps connect everyone better, reduce misunderstandings, and solve any possible conflicts more quickly, or even prevent them. In many instances, the changes and adjustments to the projects can be made faster because everyone is not only in the same time zone but also often in the same office.

Among the drawbacks is the fact that the cost of an in-house team is much higher than that of cooperation with an outsourcing company: you don’t only need to pay salaries, but your expenses also include overhead salaries, benefits, training costs, and more.

The IT industry is evolving very rapidly. The scope of your project may change in response to the market demand, but not all of your current employees may be ready, willing, or able to upgrade their skill sets quickly enough or change their professional focus. The solution would be to get a development team of more proficient local talent with the required skills, but unfortunately, they can cost more. If you have budget constraints, this option can be practicable only to a certain extent. Also, keep in mind that there is a tendency in the US and Europe for top experts to change companies due to the high demand and better wages. So, you will always be in danger of losing a key team member during a crucial stage of your project’s implementation. Who needs that to happen? Additionally, it may be hard to keep your team up-to-date with the required people without having a big pool of experts in-house.

There is an option of hiring software developers as separate freelance experts, but you will still be faced with the hiring hassle and a limited pool of available experts. The possibility of building long-term relationships will be uncertain. With freelance, you will usually receive just an implementer team and not active participants in your business processes.

Read also: Hiring Java Software Developers in 2021

Outsource development teams

The two biggest drawbacks of outsourcing are the lack of control and concerns about communication. Yes, it is harder to keep track of the progress and make quick decisions when experts are not in the same building, but the COVID-19 pandemic has made companies switch to remote work anyway. Fortunately, with a reliable software development outsourcing partner and a clear understanding of the business objectives, your company can be even more successful and turn this obstacle into an opportunity by using a proficient dedicated team of software developers.

What are the benefits of hiring a dedicated development team?

Saving costs

According to a study by Deloitte, 59% of companies consider outsourcing as an effective cost-cutting tool. Indeed, a company from the United States can cut its costs by around 50% by hiring a dedicated team.

Access to the expertise

Sometimes the required software development experts are just impossible to find locally, or you have to pay them a salary way beyond your limit. If you choose to hire a dedicated software development team that operates remotely as a means to expand your existing team, you will have access to the best experts from all over the world.

Greater flexibility

You can change the team composition in accordance with your current business goals as quickly, as required.

Fast scaling

If you need to grow fast, outsourcing is a great option too. Hire a team of developers with as many talents as you need within a very short timeframe to complete your objectives and fulfill the business vision!

“Do what you do best and outsource the rest!”
— Peter Drucker

The Main Types of Engagement Models When You Want to Hire a Dedicated Software Development Team

Every IT company has its own way of cooperation with their clients, SPD Technology offers three main engagement models to cover the most popular scenarios.

Full-Cycle, Project-Based Outsourcing

This is a perfect choice if you want to have full control over the entire process with maximum predictability. Under the scenario where you know exactly what you want from a project, can visualize the final product, and can estimate the deadlines and the budget, the Full-Cycle, Project-Based Outsourcing is the way to go. Your outsourcing company will be your partner from the very beginning to the release, maintenance, and ongoing improvement stages. This is how the stages of this model look:

• Defining business objectives
• Project Evaluation Workshop and Proof of Concept (PoC) are needed in some cases
• Research and design
• Development
• Post-launch maintenance and support

Our team will be your software solution development partner from your product’s inception throughout the development and maintenance phases. This includes ongoing development, feature improvement, and performance optimization after the release. As a result of our involvement, you will receive a fully functional product on schedule, with detailed reports and complete transparency during each stage of the product development process.

Team Extension (Staff Augmentation)

This model fits when you know your business goals and the way to achieve them, and don’t need to hire a dedicated team to work on your project because you already have specialists. All you are lacking is additional experts for the job. The Team Extension (Staff Augmentation) model is the option for Chief Technological Officers who are looking for a team of experts of a specific type for a specific period of time. For example, it could be a web development services team that needs to be augmented with web development/mobile software developers and QA specialists to build a sub-project. You can also hire a software development team that will include a Project Manager, Business Analyst, or Team Lead, but you will maintain control over the project’s overall strategy. The time and cost savings are the main reasons to choose this model over the hassle of hiring offshore software developers as short-term employees locally.

Managed Team (Dedicated Team)

In times when the final goal is unclear, but you have a general direction this model might be the most suitable one. It is also a great fit when you already have an in-house or outsourced team of software engineers implementing a project, but you need a workforce boost. Sometimes, your project changes dramatically during one of the iterations, and you don’t have the luxury to be able to hire a development team locally. The Managed Team (Dedicated Team) allows your in-house team to join forces with a remote team of experts for the best results. In this article, we will focus on this model and provide a detailed explanation of its value for businesses.

The benefits of the Dedicated Development Team Model

More delivery with the same budget

Previously, it was mentioned that outsourcing is popular as a cost-cutting measure. With a dedicated team model, we can consider your project to be cost-efficient thanks to the possibility to hire software developers that are more proficient and capable of producing better results for the same money.

Full control of the project’s delivery with daily updates

You will receive regular updates during each step in the development. You can share the decision-making or delegate some decisions to the dedicated software teams.

Agile development team

The main difference between the traditional and Agile approaches lies in the collaboration between the experts. The chances are that the Dedicated Software Development Team will adhere to the Agile standards, so here is a quick comparison:

The Agile approach ensures the flexibility of this model, making it possible to adjust the conditions as you need to do so.

Predictable costs

You will be aware in advance what the hourly rate of each expert is. This will help you plan the budget more precisely for the entire duration of the project.

No hiring hustle and paycheck pain

Software development companies have their own recruiters and HR experts. You don’t have to worry about any HR-related activities, paying only the hourly rates.

Fast and easy start

All you need is to know what you are lacking for the project, how the project scope has changed, and how the requirements have changed. Then you can go directly to the interviews and find suitable dedicated software developers.

Quick time-to-market

When the time to market is crucial, you can adjust your strategy accordingly. You can hire the software developers that suit your purposes best right from the start to achieve this goal. Dedicated Development Teams are great for startups looking to launch their products sooner.

24/7 Office: Time differences as a benefit

Different time zones are not always a bad thing, because you can plan the operations in such a way that your operations will continue 24 hours a day. Hire dedicated developers even in the most inconvenient time zones and you will benefit in other ways.

The ability to focus on your business operations

Hiring a dedicated team, without the recruitment hassle and with the option of shared decision-making will free up time and energy for running your core business operations. It will allow you to come up with more plans for your project and improve your overall vision for the project.

Dedicated Development Team structure

The founder of Amazon, Jeff Bezos, coined the term “two-pizza team”, and it came from the phrase “If you can’t feed a team with two pizzas, it’s too large”. The same holds true when you hire a software team. As mentioned previously, according to the Agile approach, 6-8 experts in dedicated application development teams work great. This team can include:

How do you build a Dedicated Development Team?

Defining the requirements

Contact your outsourcing provider and present your business idea to them to receive the project requirements and tech stack for the solution. A detailed requirements document along with general information about your company will help the IT provider find dedicated software developers that are a good fit both technically and culturally.

Interviews with experts

Remote dedicated teams are usually formed from scratch in accordance with the project requirements. You may be lucky enough to get software developers who have worked together on a similar project, but that’s not the case most of the time. In case you already have a trusted software development partner, you can let them hire a development team for the project. If you want to get more involved in the hiring process, you always have an option to conduct interviews with your candidates. You can take part in multiple rounds of interviews during the hiring process. All the candidates are approved first by your IT provider after technical and HR interviews with them. These interviews are aimed to confirm the candidate has the required skills and motivation to take on the project. Only after screening by the software provider, will you receive a list of candidates that can be a good fit.

The hiring process is also an excellent opportunity to recheck whether you’ve partnered with the right outsourcing company. You can evaluate how they’ve managed to meet your expectations and requirements, what style they use for internal communication, and what company culture they have overall. These details will help you make a more informed decision. You will be able to evaluate the potential for future cooperation. Don’t pay before you hire the required software developers, and insist on signing NDAs before the interviews are held.

Launching a dedicated team

If interviews go well, you will already have a group of people who are able to get the job done. The launch will be fast and easy and it will let you focus on other goals.

Managing a dedicated team and receiving updates

You can pick your own style of management: some will choose daily updates with more control, while others will give more free hand to the Project Managers and software developers. Receive as many updates as you need to follow your business goals.

Release and contract renewal

After the experts complete their part of the job, you can draw some conclusions on how well this model has performed in relation to your project. Hopefully, with the next contract, you will trust more responsibility to the remote experts, increase the scope of your projects, and make more money, as a result.

Things to know before hiring a dedicated team

Understand the software development processes

You must be fully aware of all the minor details in the software development process. Understand clearly the responsibilities of your IT provider and your own ones in order to avoid any conflicts or misunderstandings on a high level.

Learn what your experts can do

During the interviews and actual work on the project, find out about the skills of your remote experts. Just like your in-house team, they could be useful in other projects. Knowing more about your team members’ skills and experience can save you time in the future!

Always sign an NDA

The protection of intellectual property and confidential information is crucial in 2023. Trust and security are two significant concerns when it deals with outsourcing partnerships. To make sure this wouldn’t be a problem, review your IT provider’s intellectual property policies and NDAs before the kick-off of the development process. Keep in mind that when you hire software developers, there is an option to sign a personal NDA with each of them.

Get a detailed and transparent contract

The contract you sign must have a clear description of:

• The development rates with detailed breakdowns depending on the required expertise
• Possible discounts
• Payment and invoicing protocols
• Credit periods and limits
• Warranty conditions and periods

Read also: How to Set Up Your Own Offshore Development Center in 2022

Dedicated Development Team Model vs. Fixed Price vs. Time and Material

These three models are often compared when companies consider hiring a provider of software development services, but what are the key differences that may or may not work for your specific project? What makes a dedicated team model stand out from the other available options?

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Where to hire a dedicated development team?

So, you decided that the Dedicated Team approach is right for you. But what regions should you focus on in order to hire the members for the dedicated software development team that your project requires? Let’s take a quick look at the most popular outsourcing destinations suitable for this purpose.

There are seven popular regions that are well-known as places to hire programmers. Those regions are North America, South America, Western Europe, Central Europe, Asia, India, and Australia. These geographies are very different in terms of price and qualifications. For example, in the US you can find highly skilled experts to join your dedicated team among the more than 4 million software developers, but the price tag will be the highest. Regions like Asia and India will offer less expensive experts for dedicated software development teams, but there are a lot of beginner-level programmers, so there is a risk of compromising on quality.

So, it is important to strike a balance here. Central Europe might be the middle ground in terms of the maximum cost-efficiency as far as the Dedicated Team model is concerned. Ukraine and Poland alone have over 400,000 proficient tech experts combined, which is more than enough to find exactly the experts you need for your dedicated team. The hourly rates of software engineers in Ukraine are almost twice lower than those in the US, but the high level of skills remains.

The platforms to hire dedicated software development teams

In the variety of places where you can find experts for your dedicated team, few platforms truly stand out. By using the following B2B directories, you can find a reliable IT vendor with a proven track record and an experience in the industries you operate in:

• Clutch.co
• GoodFirms
• IT Firms

Always read carefully through client reviews and feedback to get a deeper understanding of how a specific vendor operates and what roadblocks you may hit in your potential cooperation.

What to expect this year if you plan to hire a development team? [Updated 2023]

According to Business Wire, the software development outsourcing market will increase by 70% between 2022 and 2023, so this year we can expect a massive expansion in this area. Gartner predicts that the worldwide IT spending will grow 5.1% in 2023. The organizations will continue to invest in digital technologies, despite the global economic slowdown.

A few years ago, the main reason for hiring a dedicated development team was to cut costs. While this motivation is still an important factor in outsourcing, in 2023 we should expect more focus on the quality of the service. Companies will be willing to pay more money for services if they add value and quality to their organization.

SPD Technology offers the best services possible for a reasonable price, always keeping the quality of the product and the interests of our clients front of mind. We have the capabilities to build your dedicated team fast, so you can start achieving your software development goals as soon as possible with a team of the most suitable experts.

Our expertise in remote development

SPD Technology is an innovative technology partner for organizations that offer Business Analysis, IT consulting, and software product development services. Since 2006, we have been helping clients in Finance, Fintech, E-Commerce, Tourism, and other industries build software products of their dreams. SPD Technology’s expertise spans from the initial research and development and providing popular services like Java Development Services to the use of bleeding-edge technologies like Artificial Intelligence, Machine Learning, and Big Data.

SPD Technology takes pride in being a trusted development partner, not just an outsourcing service provider. We are focused on building long-lasting relationships and not any short-term gains. Typically, we take ownership of the client project and grow together with our partners.

In many instances, our team members have been fully integrated into the team of our partner and became permanent members of the project. In June 2008, we created a partnership with a startup called NimbleCommerce. In 2016, this startup was acquired by the BlackHawk Network. However, SPD Technology’s team continued working on the project. This team consisted of a total of around 80 permanent team members, who performed business processes and assets consolidation, data transformation/migration, and post-transition support for the new owner of the project – an industry-leading branded payments company. You can read a detailed case study here.

In one of our more recent projects, we partnered up with Poynt, a revolutionary open commerce platform and the inventor of the Smart Terminal. The partnership commenced in early 2019. SPD Technology’s experts were engaged based on the remote dedicated development team model and provided software development, software support, maintenance, and brand-new features development and improvement services. On December 15, 2020, it was announced that GoDaddy signed a deal to acquire Poynt for $365 million. SPD Technology’s project team which consisted of 25 experts continued to work for Poynt under the new ownership.

The average duration of our long-term client relationships is 5 years. Currently, we have 500+ certified and award-winning experts involved in nearly 20 projects all over the world. Our partners are always able to communicate not only with our Management but also with our software developers to get detailed updates on the progress of their projects.

Conclusion

Whether you already have a team of in-house software developers, or you don’t have any at all, the Dedicated Development Team model is a great choice for building your software product. If you are tight on budget, not sure about the technical requirements, but still want to start implementing a long-term project, give this model a try! With a trusted outsourcing company you will gain a partner that shares your goals and vision and can help you find the right business strategy.

Further Reading

1. Embracing Agile
2. The Pros and Cons of IT Outsourcing