Gain Better Expertise And Outcomes With a Dedicated Development Team
Technavio, the market research and advisory company, reports IT outsourcing market size as growing up to $98 billion during 2020-2024. The need for qualified software developers is increasing immensely. For example, the US Bureau of Labour Statistics calculated in 2020 1.4 million more software developer positions than specialists, who can apply for them. It’s quite a challenge to find enough engineers with proper background and reasonable salary expectations to meet the demands of your project. That is why many companies focus on IT staff augmentation services and hire dedicated development teams.
If you find your business:
- struggling for local talent
- operating with a team with non-sufficient tech skills
- overspending to stay local
- finding “scale fast” option challenging
- facing too many administrative duties.
It’s high time to consider outsourcing as a winning way to extend your team, augment specific tech expertise, develop and scale faster. A dedicated development team grants your control over product development, cuts your business running costs as well as increases your capacity to innovate for more revenues.
Dedicated Development Team As A Winning Approach To Outsourcing
With a global $23.6 billion revenue generated through IT outsourcing in recent years, dedicated development team services can be a really efficient digital strategy for your business.
What Is A Dedicated Development Team
A dedicated development team is often described as a team of experienced developers each with a specific set of skills that you define, each meeting your processes and workflow and devoted solely to you and your business needs.
In the case of dealing with a dedicated team, you do not take care of the office equipment, specialized software, benefits, and perks for your team members. You just collaborate with a pool of talented qualified software engineers dedicated to your project and working remotely, communicating with you daily. This model allows you to save up to 60% of operational costs.
Forbes describes a dedicated development team in such a way:
The main characteristic trait is that outsourcing vendors are totally responsible for building a team in accordance with your requirements. And this team is working solely on your project with both parties (client and vendor) with deep involvement in the operational workflow and considering all critical issues. It’s a pool of outsourced specialists, who are part of a client’s company for a certain period of time.
Dedicated Development Team Model Pros and Cons
You get an efficient approach, high return on investment, and cost efficiency using a dedicated development team model in case if it is:
- a long-term project frequently updated and with the renewed priorities;
- fully undefined project scope and technical demands at the beginning of the project;
- lack of time or expertise;
- not reasonable to pay local salaries and maintain administrative duties;
- not reasonable to spend time for talent acquiring;
- necessary to meet tight deadlines in project scaling.
Software development companies like Innovecs are helpful in arranging effective operations in accordance with a dedicated team model. They:
- create a solution meeting your demands;
- delegate project scope to experts;
- make updates during all of the project stages;
- empower your product with integrations.
Here is the opinion shared by one of Innovecs’ clients about outsourcing a dedicated development team:
The following stages of the collaboration within a dedicated team model are reflected in the reference: close collaboration, high-quality code, and a fast-changing environment.
All the depicted stages are usually performed with a custom agile development approach focusing on:
- reducing risks;
- transparent communication between the teams;
- obtaining predictive project velocity;
- managing project improvements and scalability.
Software development quality can be assured in many aspects. Success factors can be the right company digital strategy as well as team effectiveness and suitable measurement metrics to assess it. And the selected outsourcing model influences the outcomes as well.
Dedicated Development Team Vs Other Outsourcing Models
Sometimes the “dedicated development team” concept is treated the same as “dedicated development center”. Forbes distinguishes them both plainly by explaining DDC in terms of business model, not “just enlarging client’s team”, but a self-sufficient business unit “able to deal with a variety of IT issues”.
A fixed-price contract is also declared as a popular outsourcing model. In the case of a fixed-price contract, a predefined tech scope at a fixed price is provided. It’s neither good nor bad, it just can suit or not your project requirements. Mainly fixed-price contract model is used for short-term projects with no further changes or improvements and clearly known objectives before the work starts.
The dedicated development team provides additional staff with the possibility to extend the engineers pool at any time with the cost in parallel with all the tasks performed.
T&M (time and materials) is another popular pricing model. In the case of using this model, the customer pays for the result based on the labor amount used. Only time spent for certain tasks execution is paid, not the time engineers have a break or leave. The client can change the work scope at any time – that is the key efficiency issue. But sometimes it’s quite complicated to estimate the budget beforehand as well as there’s a number of bottlenecks in communication because the outsourced team is not so closely tied with the client.
How to understand whether you need outsourcing or not? Here it’s worth mentioning the “Two-pizza Team” rule used by Jeff Bezos, the Amazon owner. The sense of the rule is that your team is too large if they can’t be fed with two pizzas. So, it’s better not to hire continuously for more projects launched, but to apply a dedicated team model to perform better in creating MVPs, scaling your business, being more effective, and gaining higher ROI.
How You Benefit From Dedicated Development Team Services
Tapping into new tech and domain expertise is challenging and not always successful judging by the statistics below.
The level of satisfaction with the outsourced services depends on the number of costs saved, provider trustworthiness, communication level, SLA terms fulfillment. But this or that business benefits from the chosen vendor services because a company gets:
- the extended professional team integrated into your on-site engineers’ pool;
- full control over product development;
- third-party arranged care on administrative activities;
- expert consulting on demand;
- possibility to add more expertise in case of necessity;
- increased motivation for the whole team.
All the above-mentioned benefits appear to be obtained in case you succeed in establishing an effective collaboration process.
How To Reach The Most Effective Collaboration
Deloitte provides advice on how to outsource wisely in IT. They believe that future successful collaboration depends on the following preparatory stages:
- conceptual and strategic project preparation beforehand;
- arranging selection of the service providers in a proper way;
- focus on contract negotiation and post-contractual assistance;
- secure project success legally;
- choose a proper outsourcing model not to exceed the budget or being unable to implement necessary project improvements.
Awareness of the team assembling process is also helpful in further fruitful collaboration.
After project launch it’s crucial to remember simple tips concerning effective collaboration:
- establishing plain and clear reporting system (work done, planned, and interfering issues);
- creating defined operation procedures;
- maintaining effective communication (schedule face-to-face meetings, leverage personal connections).
Dedicated development team outsourcing success case
Innovecs as a recognized software development company has collaborated with EZ Texting, provider of SMS/MMS marketing solutions. EZ Texting set standards for business texting platforms and served businesses from the entertainment industry. They seek to extend market coverage and arrange the platform scale easily.
Innovecs provide them dedicated development team services to:
- enlarge specialists pool (delivery center of 50+ specialists);
- select suitable project management framework (agile cross-functional agile teams);
- a migration process to microservices (from PHP to Java).
Challenges Of Dedicated Teams and Our Solutions
Deloitte mentioned in its Global Outsourcing Report that innovation created additional value in outsourcing and it’s helpful in facing the challenges of the field. Innovation is being used to:
- increase service quality level (58%);
- improve user experience (38%);
- decrease operational time (21%);
- deliver new business capabilities (20%).
Such technologies as Robotics and Cognitive processes automation, cloud computing is affecting outsourcing relationships greatly. They lower the cost of service delivery, speed up the communication inside the team, enhance innovation for better outcomes. If challenges are addressed in time and in a proper way, dedicated team utilizing is implemented smoother.
Identity Management Institute provides advice on mitigating security risks. They propose to learn more about:
- vendor’s hiring practices;
- adequate employees training provision;
- customer’s notifying procedure if the outsourcing company finds out data theft or any fraudulent activities.
Proper SLA (Service Level Agreement) and compliance auditing can be solutions to manage security risks. But according to Deloitte, the majority of the companies treat cybersecurity as a part of outsourcing, but not the problem. 64% of the clients modify their operational processes additionally: define security protocols more clearly, conduct periodic evaluations, expect service providers to monitor risks as well. Special guidelines on outsourcing in every industry (e.g. EBA guidelines on outsourcing arrangements in the banking domain) can be treated as a solution as well.
Effect Of Legislation
Sometimes, especially in the case of offshore dedicated team collaboration, regulatory issues matter as well. The following issues should be considered while outsourcing:
- data privacy;
- possible restrictions for hiring;
- dedicated team IT outsourcing contract peculiarities.
Both cultural and regulatory differences demand proper focus on contract subject matter, team structure and terms of assignment, information privacy, intellectual property issues, service delivery, and acceptance procedure. When choosing a vendor you should be confident in its ability to stay on top of legal issues.
Responding To Service Provider Issues
Ionic Consultancy notices the most of the companies when indicating the difficulties in responding to service provider issues, seek “to manage the relationships”. As we told above smooth communication gives the possibility to benefit from dedicated team outsourcing. Amazon calculates only 21% of the companies are willing to use termination when experiencing the necessity to remediate issues with the chosen provider. Most of them are thinking of restructuring the deals, enhancing management options, or leadership escalation.
Forbes Expert Panel explains plainly how to manage remote team effective work. Ajay Gupta, CEO of digital-driven marketing agency Stirista, shares his vision of collaboration as “each step of this way has resulted in both successful campaign outcomes, and, just as importantly, our satisfaction as a client”. As you see, simple things comprise huge outcomes.
Global Sourcing Association (GSA) considers fast-paced acceleration (ongoing adoption of new technologies), development of the employee well-being concept, resourcing gigs, empathy issue in CX as the key 2021 trends, which drive outsourcing from high-quality vendors with deep domain expertise.
GSA plans to promote the strategic sourcing profession by highlighting key challenges for outsourcing services. They focus on:
- arranging Sourcing Tech series to explain how to adapt and deliver value from technologies while outsourcing;
- issuing whitepapers to share the experience of the best-performing companies using strategic sourcing function;
- creating a working group to develop a guide on how to manage and mitigate the outsourcing security and service quality risks;
- providing advice on how extra automation via dedicated development teams outsourcing can bring added value and higher revenues to your business.
It’s possible to conclude if numerous strategic sourcing activities have become a focus of the international body, outsourcing is really a growing trend with challenges to address.
A dedicated development team stands for hiring people from vendors for doing particular jobs. It’s often managed on the customer’s side. The reasons to use a dedicated team are:
- shorten the expenses;
- optimize hiring time and administrative costs;
- getting highly qualified specialists.
Dedicated teams are usually compared with the two other outsourcing models: T&M (where you pay for the resources used) and fixed-price contracts (where you pay for clearly predefined tasks assigned). The dedicated team model seems to be the most flexible one and the most cost-efficient for long-term projects.
When choosing a dedicated team to augment your staff you get:
- continuous communication with outsourced engineers;
- agile software development;
- high-security level due to long-term collaboration and team integration into your business;
- full dedication to your project;
- unlimited access to high-quality specialists pool.
When choosing collaboration with a dedicated team of any location, one should consider facing regulatory (legislative), cybersecurity, and communication issues. The client’s readiness to respond to any situation that occurred smoothes the cooperation and enhances the desired outcomes.
Top Reasons To Hire Dedicated Team In Ukraine
Companies are looking for vendors worldwide. The rates differ from region to region. Moreover, one should consider cultural differences, time gaps, tech expertise variety while making the decision to outsource.
It’s worth hiring a development company in Ukraine due to:
- powerful fast-growing IT service market;
- location of talented engineers with a creative mindset and deep tech expertise;
- positive business climate zone;
- affordable salary rates in comparison with the US.
Once you decide to collaborate with the Ukrainian specialists to develop the product from scratch or to scale your business, you are welcome to contact us and gain an expert guide in software development.