November 26, 2022

Choosing Software Development Models: Dedicated Team vs Outsourcing

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When your company decides on starting a software development project, it may face unpleasant discoveries. Having a full-staffed IT department entails large expenses while staff augmentation from scratch is one of the biggest challenges in 2022. GoRemotely shares the statistics where was concluded that there are 5 jobs for each software developer in the USA. Moreover, the Korn Ferry management consulting firm states that more than 85 million jobs can be unfilled by 2030 due to a lack of skilled people.

Primarily, honed staff augmentation and employment coverage processes suffer from a shortage of professional software developers. That’s why companies worldwide are more likely to delegate these operations to specialized agencies. Such firms also frequently provide different software development cooperation models where offshore outsourcing and dedicated team services are the most demanded. Nonetheless, operations may differ for each specific business — you should choose your best terms depending on your established processes and project requirements. This guide is aimed at bringing you more clarity on how to opt for suitable options. 

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What is the dedicated team model in IT?  

A dedicated team is a software development cooperation model which implies hiring IT staff under specific project needs. It can also be called a distinctive form of outstaffing. For example, when your company requires hiring five developers, one designer, and two QA engineers, you can find a contractor to close the staff augmentation step instead of doing this independently. 

How can you benefit from such cooperation? Generally, specialized companies have extensive databases of IT specialists, meaning that the time to find a needed talent is significantly reduced. Moreover, recruiters from a contractor’s part perform a primary interview to filter out inappropriate candidates — you just need to check their technical skills and choose the most relevant option for you. 

At the same time, the dedicated team model is not limited to recruiting services. Some contractors can also offer you full support during performing your project. For example, you can additionally request human resource management, legal, financial, and security assistance. This way, your company gets a competitive team and doesn’t need to take care of employee coverage. 

There is a difference between the outstaffing and dedicated team models. In the first case, you hire one or several developers for a specific time frame and decide on where to use their skills. The purpose of the dedicated team model is to close your project using external forces. You can be sure your development will be done in time.  

Benefits of the dedicated team model

Companies consider dedicated teams due to their reliability and lower cost compared to other development models. To learn more about the main operational challenges and ways to avoid them, read another article in our blog.

Among other benefits of the dedicated team model are the following: 

  • Clear conformity of hired software developers’ skills to your project requirements.
  • Reduced time on searching for relevant candidates.
  • Full control under development processes.
  • Easy business scaling with the possibility to expand your R&D centers in other regions.
  • High adaptability to project requirements. 
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The basics of the outsourcing model in IT 

Outsourcing is a software development model which implies delegating all processes to a third-party company. Such agencies already have a full staff of specialists needed to manage your development operations from A to Z. IT outsourcing to a software development company is not about writing a piece of code for your company. It also involves deep research before starting your project, discovering unique features based on market trends, and so on.

During the cooperation with an outsource software development company, all processes are under the control of your vendor. You can also get an appointed project manager to control your project goes smoothly at each step of the software development lifecycle whether it be planning, design, or deployment. It’s also possible to arrange regular meetings with your outsourced software development team to discuss the process in detail. 

There are also different types of software development models on an outsourcing basis: time and material and fixed prices. In the first case, you, as a client, pay only for time spent on development. The fixed price model implies a client and a contractor agree on project scope, requirements, and price in advance. 

Benefits of outsourcing cooperation model

When outsourcing software development to a proficient contractor, you can avoid mistakes and risks related to the lack of expertise and operational basics. This is a good option for start-ups developing their first MVP. Small and mid-sized businesses can also benefit from outsourcing since they don’t need to form an IT department from scratch and keep up with basic software development processes. 

If choosing the outsourcing cooperation model, you can get 

  • Access to the in-depth skills, knowledge, and expertise of your outsourcing partner. 
  • Possibility to cooperate with developers worldwide although geographical boundaries. 
  • Well-planned software development processes with no need for micromanagement. 
  • Financial flexibility. 
  • Reduced costs needed for software development. 
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Dedicated team or outsourcing: what model fits your goals best? 

Since each cooperation model has its unique benefits and features, companies should opt for a suitable option depending on their current inner processes. Below, you can explore how the organizational structure differs in the outsourcing and dedicated team models and choose the best one for you. 

Risk management 

One of the main differences between the outsourcing and dedicated team models lies in risk management. When you consider hiring dedicated teams, you should be aware of all issues which might happen during project implementation. For example, software developers can miss deadlines and this will be your full responsibility. Nonetheless, your vendor should provide productive teamwork: equip comfortable offices, give affordable compensational packages, and pay salaries on time. 

On the contrary, the outsourcing model is based on the full delegating of software development processes to your partner, meaning it covers all risk management during project implementation. Deadlines are controlled by project managers while each step is discussed with a client. Even if you have specific requirements, a competent provider will help you to improve them to achieve the best result. Nonetheless, outsourcing is full of different operational risks which you can study in another article. Here, there are also detailed answers on how to overcome them. 

The dedicated team model will perfectly suit businesses that already have an experience in software development and team management. The outsourcing model is a suitable option for start-ups, small, and medium-sized businesses that launch their first MVP and don’t have a regular in-house development team. 

Communication structure

Communication is a key to success when developing projects of different complexity. Generally, outsourcing companies provide you with well-established teams where members know each other well. This allows you to quickly launch software development processes and avoid miscommunication mistakes. 

When hiring a dedicated team, candidates are chosen based on your requirements. To put it simply, crewmembers are recruited from scratch. Each developer adaptation can take some time. You shouldn’t expect a fast launch, but a competent provider can speed up the process. 

If you need to start your project as soon as possible, it’s better to consider the outsourcing model. Thus, a dedicated team is a perfect match when there is no rush.

Management involvement 

The dedicated team and outsourcing software development models require different levels of management involvement. In the case of a dedicated team, you should manage the workflow on your side. Or, assign a person from your in-house team, responsible for smooth operations. 

From this point of view, outsourcing is more convenient. Your partner provides you with experienced project managers responsible for process compliance. They also keep you informed about all updates and issues. So, if you’re don’t ready to manage processes on your side, it’s better to outsource.

Experience and expertise

When hiring a dedicated team, your contractor selects candidates that suit your project requirements. This means you can opt for relevant experience and technologies. Nonetheless, you should employ your own experience of management arranging to focus software developer’s skills in a careful way. On the contrary, outsourcing vendors can strengthen your development processes with their unique expertise gained in various projects. 

Dedicated teamOutsourcing 
Risk management Under your responsibilityCovered by your outsourcing partner 
Management involvement HighLow
Experience and expertiseHighHigh

Where to hire developers for your project

Coreteka is a reliable provider with 5+ years of experience in the software development domain. We offer both outsourcing and dedicated team cooperation models allowing our clients to choose the best option for them. It’s also possible to request staff augmentation services which include the assistance of skilled recruiters. 

If you still can’t decide on what software development model will fit your requirements best, feel free to contact us. 

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IT outsourcing and dedicated team services FAQ

🔴 Dedicated team or outsourcing: what model is the best?

It depends on your project goals and requirements. In general, companies with well-established management processes can choose the dedicated team model. But if you’re a start-up or small-sized business which runs its first software development project, it’s better to rely on the experience of an advanced outsourcing partner. 

How to hire a dedicated software development team?

You can contact specialized agencies like Coreteka. Such companies take over headhunting, recruiting, HR management, legal, financial, and security issues. All options are discussional. 

🔴 How to get IT outsourcing services?

IT outsourcing companies provide such types of services. You just need to find a reliable supplier and describe your project requirements in detail. You should also remember that a good outsourcing company is eager to help you determine all features, risks, and challenges to deliver the best result. 

How much does it cost to delegate software development processes?

The final cost depends on your choice. For example, in the outsourcing model, choose between time and material or fixed price. In the dedicated team model, the total price is calculated based on the number of needed software developers. 

Bottom line 

Due to the high costs of software developers’ coverage and the global IT talent shortage, companies are more likely to delegate their software development processes to specialized agencies. Nonetheless, each business is unique and requires different solutions. If you run your first software development project and want it to go as smoothly as possible, it’s better to choose the outsourcing cooperation model. After all, your technological partner can help you implement the best practices in your product. The dedicated team cooperation model implies your full responsibility for a project. It suits well for companies that already have established management processes and want to expand their business. 

Contact us to discuss your project details and get a free consultation on what software development model is appropriate for your company.