A guide to dedicated development teams

Introduction

Outsourcing has long been a go-to strategy for companies seeking to optimize development costs, tap into specialized know-how, and speed up time-to-market. Today, information technology is the most outsourced industry, with cost-cutting being the primary driver for companies to engage experts in remote locations.

• 37% of IT operations are entrusted to third-party vendors.
• 64% of outsourced services worldwide are accounted for by software development.
• 76% of executives participating in Deloitte’s latest outsourcing survey claimed that their IT services were delivered via third-party models.
• 57% of IT businesses consider cost-cutting the primary driver for outsourcing.

As businesses aim to gain more control over projects while enjoying cost-efficient long-term support for their product initiatives, dedicated development teams have emerged as a favored outsourcing model. This model offers companies both the flexibility to adapt to their project needs and the benefits of tapping into expertise from around the globe. 

What are dedicated development teams?

Dedicated development teams offer a flexible outsourcing solution for long-term projects requiring diverse expertise in a wide range of technologies and specializations. Companies have the autonomy to select professionals based on their specific goals, strategies, and challenges, with the flexibility to adjust team sizes as projects evolve.

For example, if a tech company hires a dedicated development team to develop an e-commerce platform, it might consist of backend developers, frontend developers, UI/UX designers, and QA experts, all dedicated to that project. The dedicated team seamlessly integrates into the company’s workflow, ensuring alignment with business goals and smooth collaboration with in-house teams.

Unlike other outsourcing models that spread resources across multiple clients, a dedicated team focuses solely on one project at a time. This approach fosters an ownership mentality and retained product knowledge, contributing to better outcomes.

With a dedicated software development team, you’ll enjoy the benefits of a focused, long-term collaboration without the administrative burdens of managing internal staff. The external service provider handles tasks such as HR, payroll, and taxes.

Dedicated teams vs team augmentation vs solutions teams

Outsourcing software development can be a game-changer, but finding the perfect fit among various models is pivotal for a successful project. The choice depends on a multitude of factors, such as project type, requirements, duration, complexity, budget constraints, desired level of stakeholder involvement, and the need for specialized skills. 

Each model presents its own set of advantages and challenges, empowering businesses to fine-tune their outsourcing strategy to match their unique objectives and project dynamics effectively. 

Time and material vs fixed price model

The fixed price model involves a pre-agreed upon project cost regardless of the actual time and resources expended, providing predictability but less flexibility for changes. On the other hand, time and material model charges are based on actual time and resources spent, offering greater flexibility for adjustments as the project progresses. 

Dedicated teams typically operate under the time and material model, as team members work exclusively with a single client for long-term projects.

Long-term vs short-term engagements

While short-term engagements are possible, dedicated teams are best suited for medium- and long-term projects that require in-depth engagement and ownership mentality. The dedicated teams model aims to foster a deep understanding of the project’s intricacies over time, leading to more efficient collaboration and superior outcomes.

Do you have control over who’s on the team?

When outsourcing dedicated teams, companies have full control over team composition. While you can opt to hand-pick every team member, you can also delegate the hiring of middle- and junior-level roles to the dev shop. Both approaches are feasible, allowing you to determine the level of management that aligns best with your preferences.

Typical roles you’ll find on dedicated teams include:

• Application developers 
• Quality assurance experts and software testers
• UI/UX designers
• AI and data engineers
• Project managers
• Other specialized experts tailored to your project’s specific needs

When are dedicated teams a good idea for your company?

Benefits of dedicated teams

Specific expertise and domain experience

Access talent possessing specific technical skills and industry knowledge essential for achieving your project needs and addressing your business goals.

Team scalability 

Ramp up or scale down your team to efficiently adjust to project requirements according to changing circumstances, ensuring optimal resource allocation.

Cost-effectiveness

Pay only for the resources you need, without the additional overhead costs associated with hiring and maintaining an internal team.

Global talent pool

Assemble globally distributed teams with diverse perspectives and experiences to enhance creativity and innovation as well as ensure around-the-clock support.

Faster time-to-market

Delegate tasks to dedicated specialists to work on multiple fronts simultaneously while freeing your internal team to focus on core business activities and allocate resources for maximum value generation.

Dedicated focus and ownership

Ensure efficient workflow by having a team that focuses their efforts and attention fully on your project while possessing a strong sense of accountability and ownership mentality.

Retained product knowledge

Benefit from improved product support, troubleshooting, and enhancements through long-term collaboration with a team that has extensive knowledge of your product.

Challenges of engaging dedicated teams

Where to hire remote developers: local, nearshore, and offshore teams

When it comes to hiring remote developers, businesses have various options to consider, including local, nearshore, and offshore dedicated teams. Each option offers unique advantages and considerations, making it essential for companies to evaluate their specific requirements and preferences. In this section, we will compare these three models to help you determine the most suitable choice for your development needs.

Dedicated developers’ rates

The costs of dedicated developers’ services vary significantly based on factors such as geographical region, skill level, and market demand.

Cost comparison of hiring software developers by country

The United States

The US maintains its position as a software development powerhouse, with Silicon Valley at the forefront of innovation. With an average hourly rate of $77, the US offers access to cutting-edge technologies, rigorous IP protection, and a mature business environment. 

Despite higher costs, the US market provides unparalleled opportunities for collaboration, networking, and venture capital investment, making it ideal for startups and established enterprises alike.

Latin America

With an average hourly rate of $61, Latin America presents an attractive option for businesses seeking skilled professionals at cost-effective rates.

With over 500,000 software engineers, Brazil leads the region, followed closely by Argentina and Mexico. Brazil ranks 54th in the Global Innovation Index 2022. Argentina’s IT industry is booming, driven by government incentives, while Mexico benefits from its proximity to the US and a large bilingual workforce. 

Eastern Europe

Countries like Ukraine, Poland, and Hungary are top destinations for software development, boasting a combined total of over 700,000 IT specialists.

In 2024, the software development industry in Poland is forecasted to reach a market size of €8.3 billion, with 91,365 professionals employed in the sector. Thanks to its government support for the industry, Poland serves as the location for R&D offices for global corporations such as Google and Intel.

Asia

Supported by government incentives, China’s tech sector flourishes, nurturing over 200 national high-tech enterprises at the Haidian Park Entrepreneurship Service Center. Ranked 56th in the Global Innovation Index 2023, the Philippines, led by Manila, is recognized as the world’s second super city. 

India remains dominant in software outsourcing, renowned for its cost-efficient services and a vast pool of over 1.5 million IT graduates annually, offering an average developer hourly rate of $32.

Why choose AgileEngine as your dedicated development company?

World-class brands trust our expertise

Most-funded VC startups and Fortune 500 brands achieve tangible results by engaging our dedicated teams: 

• 10x faster and 50% more performant solution thanks to the ETL re-architecture for the world’s #1 job website
• 25% cloud cost savings via optimization of 700 microservices for an IBM and Merck vendor
• 20+ million downloads after our backend and mobile development for a #1 health and fitness app across 28 countries
• 124% boost in conversion rate after solutions redesign for a multibillion e-Commerce company
• 12x faster release cycles for an IP/licensing platform leveraged by Disney, Epic Games, and Ubisoft
• 778K tons of atmospheric CO2 eliminated via an energy efficiency SaaS

Industry leaders recognize our work

Conclusion

Dedicated development teams stand out as a strategic choice for companies seeking cost-efficiency, agility, and the right expertise. While challenges such as effective communication and management exist, businesses can mitigate risks by selecting the right outsourcing destination and partners.