Dedicated software development team: the ultimate guide for 2025 and beyond

Hiring a dedicated software development team can be a game-changer for your business.

But, this is a big decision that you need to get right.

And that’s where we come in.

Here, we’ll cover everything you need to know about dedicated teams – why and when you should hire them, how to do it, and how much it will cost you.

Let’s dive in!

What is a dedicated software development team?

Let’s start from the beginning – what exactly is a dedicated software development team?

A dedicated team is a software development team you hire to handle development from start to finish.

It works just like an in-house team, except it’s formed by a third-party agency or service provider.

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So, how does this work?

Well, it’s simple – you partner with a software development company with a ready talent pool who then build a team to your exact requirements.

Dedicated teams are the best fit for long-term projects that need ongoing work, especially if you have unclear requirements. We’ll touch on this in more detail later.

In short, when you hire a dedicated team, you get a ready-made team that can jump in and immediately start work on your project.

And if you hire the right company, they’ll care just as much as an in-house team.

Dedicated team vs. staff augmentation vs. project-based model: key differences

Of course, the dedicated team model isn’t the only software development outsourcing model out there, far from it.

There’s also staff augmentation, also known as outstaffing or an extended team, which is when you hire outside contractors to quickly scale or plug skill gaps in your in-house team.

And then there’s the project-based model, when you hire a team to complete a one-off project, which is best suited for smaller projects with a clear scope.

Here’s a detailed overview of their key differences:

Dedicated team vs. staff augmentation vs. project-based model: overview

In short, if you’re looking for a long-term development partner, hiring a dedicated team is your best bet.

Next, we’ll discuss some of the other reasons why you should hire a dedicated team.

Top benefits of hiring a dedicated software development team

Here, we’ll discuss the main benefits of hiring dedicated teams.

Cost-efficiency

Of course, the main benefit of hiring a dedicated team is cost-efficiency – especially compared to hiring an in-house team.

But, that should come as no surprise.

Lower costs are the main reason why companies outsource development in the first place.

In a Deloitte survey, 70% of respondents listed cost reduction as the main reason why they outsource development.

source: Deloitte

And these cost-savings can be substantial.

Compared to in-house development, outsourcing to a dedicated team can help you cut development costs by up to 53%.

source: Existek

When you hire a dedicated team, you won’t have to deal with costs like:

• Hiring and onboarding costs
• Administrative and management costs
• Training costs
• Employee benefits
• Rent and office maintenance costs

And lower labor costs in much of the world, especially compared to Western Europe and North America, don’t hurt either.

Access to a bigger talent pool

Finding the right talent is incredibly difficult.

According to a Robert Half report, 95% of tech leaders report challenges finding and hiring skilled professionals – and it’s only going to get harder with the IT skills gap widening further.

IT skills gaps have a huge negative impact on your business, no matter the size. Here’s a few of the top negative effects:

source: CompTIA

And that’s where dedicated teams come in.

Hiring a dedicated team will give you access to a much larger talent pool, including in-demand roles like:

• AI engineers
• Cloud engineers
• Data scientists
• Cybersecurity specialists

And the best part?

You don’t have to do the grunt work of finding the talent – the company you hire will assemble the team for you.

Scalability and flexibility

Another major benefit of hiring a dedicated team is that they’re very scalable and flexible.

Let’s say you’re a mid-sized enterprise planning to launch a new software product to support your core business, but you don’t have a development team.

Building an in-house team from scratch will cost you a lot of money and take a lot of time.

Hiring a dedicated software development team, on the other hand, lets you get started quickly. 

You can easily scale the team up or down depending on the project’s requirements, without the long hiring process or overhead costs of full-time employees.

This flexibility is crucial, especially in fast-changing markets. 

If demand spikes, you can scale up your dedicated team to build new features or integrations. 

And if your priorities shift or the product fails, you can easily scale it down without painful layoffs.

When should you hire a dedicated team?

Even though hiring a dedicated team comes with a lot of benefits, it isn’t always the right choice.

So, when should you hire a dedicated team?

Here are 3 scenarios where they’re the right fit:

But, why is that the case?

Early-stage startups often face constraints like limited budgets, small teams, and the need to move fast. 

Hiring a dedicated team allows them to:

• Access expertise without overhead – Startups can tap into a full stack of experts like developers, designers, and project managers without the time and cost of building an in-house team.
• Focus on core business – Founders can focus on strategy, fundraising, or marketing while the dedicated team handles product development.
• Scale quickly – Startups can start with a small team to build an MVP and easily expand the team as the product and user base grow.

Projects with unclear or evolving requirements need flexibility and iterative development. 

Dedicated teams are well-suited for this for a number of reasons, like:

• Iterative approach – Dedicated teams usually work in short development cycles, allowing for adjustments as requirements become clearer.
• Collaboration and discovery – A good dedicated team will collaborate closely with stakeholders to refine goals and define features over time.
• Reduced risk – Their expertise ensures that the project remains on track, even if the initial requirements are unclear.

Finally, complex projects with long timelines require consistent effort, advanced expertise, and a deep understanding of the product. 

Dedicated teams are ideal for this. Here’s a few reasons why:

• Consistency and stability – The same team works throughout the project, ensuring continuity and stability.
• Specialized skills – These projects often require a diverse team of experts, from backend developers to QA engineers, which a good dedicated team will have.
• Scalability and flexibility – As the project evolves, the team can easily scale to meet new demands, whether it’s adding more developers or using new technologies.

But, you won’t get any of these benefits if you hire the wrong dedicated team.

Next, we’ll show you how to get that right.

How to hire a dedicated software development team

Here, we’ll show you how to hire a dedicated team.

Define your goals and requirements first

Before you hire a dedicated team, you need to define your goals and (basic) requirements first.

If you don’t know what to build or why you’re building it, even the best company won’t be able to help you.

Clearly defined goals and requirements will give the entire team a clear direction to follow during development.

You’ll need to answer questions like:

• What are the long-term goals of our product?
• Which platform(s) are we targeting?
• Which features should we include?

This will help you narrow down the list of potential development partners and make it easier to find one that’s the right fit.

Using the SMART goals framework is a good place to start answering these questions.

Once you’ve done that, the next step is defining your product’s basic requirements and core features.

You don’t need to write an entire software requirements specification document, of course.

But, this will help you define your project’s initial scope, i.e. the deliverables, timeframe, and resources required to complete it successfully.

If you do this before you start looking for development companies, you’ll get a better idea of the team you need.

And this will make finding the right development partner much easier.

Research and shortlist software development companies

Once you’ve defined your goals and requirements, now comes the hard part – researching and shortlisting potential partners.

Now, there are a lot of options out there and finding the right partner isn’t easy. So, where do you even start looking?

You should search for potential partners on:

• Google
• LinkedIn
• B2B portals like Clutch, Goodfirms, and G2

Here’s a tip to make the search easier – be specific. Don’t just google “dedicated team”.

Search for keywords like “dedicated mobile app development team” or “dedicated software development team” + your industry to get more relevant results.

Once you have an initial shortlist of companies ready, you should read their reviews on the B2B portals we’ve mentioned earlier.

source: Clutch

This will help you spot potential red flags and eliminate companies with poor reviews.

But, even then, you’ll have to narrow down your shortlist even further – and that’s where case studies come in.

Read their case studies and review their work

Reading case studies is one of the best ways to narrow down your shortlist when looking for a dedicated team.

Case studies provide concrete evidence of their expertise and experience as well as give you detailed insights into their problem-solving abilities.

Here’s an example – let’s say you’re a big company and you want to build an internal communication app to keep your employees connected.

Hiring a company that has experience building enterprise-grade communication apps should be a no-brainer.

But, not all case studies are created equal.

Good case studies go in-depth and should contain:

• The problem they solved for their client
• How they solved the problem
• The team and tech stack they used
• The impact their solution had

So, if their case studies are vague and sound more like a marketing pitch, that’s a sign they’re not the right fit.

Define team structure and work processes

Once you’ve narrowed down your shortlist even further, now the real work of putting together a dedicated team begins.

You should start reaching out to the companies and make sure they can actually put together a team that fits your requirements.

The first step, of course, is clearly defining the roles you need, like:

• Software engineers (backend/frontend/mobile)
• QA engineers
• Project managers
• UX/UI designers
• Solution architects

What you’re looking for is a company that can set up a cross-functional team.

And there’s a good reason for that.

According to a Harvard Business Review study, cross-functional teams that are strongly supported by management have a 76% project success rate.

A good cross-functional dedicated team will communicate better and solve problems faster, which is key in software development.

Next, you want to make sure they have the right approach to development, i.e. that they use the right development methodology.

Agile methodologies like Scrum are the gold standard in modern software development – in fact, 81% of Agile teams use Scrum or a Scrum hybrid.

But, why is this the case?

Scrum emphasizes collaboration, transparency, and quick iteration. Or, in plain English, helps the team work faster without sacrificing quality.

Another important thing you should pay attention to is quality assurance (QA). 

Having QA engineers on your dedicated team is key if you want to build a high-quality product.

And if they’re integrated from the start, It will help you save money, too.

That’s because the sooner you find bugs, the cheaper they are to fix. It can be up to 100x more expensive to fix bugs post-launch than at the start of development:

So, you need to make sure the company has strong QA processes in place.

Otherwise, you risk bugs and poor software quality derailing your project.

Finally, you should pay attention to the tools they use for:

• Project management – Jira, Asana, Trello, ClickUp
• Communication and collaboration – Slack, Microsoft Teams, Google Workspace
• Version control – Github, Bitbucket, Gitlab

You want to make sure the team uses the same tools you do to make the transition easy and seamless.

And that’s how you set a solid foundation for the rest of development.

Sign a contract and kick-off the project

Once you’ve found a company that’s the closest match to your requirements, all that’s left is signing a contract and kicking off the project.

A well-structured contract is essential to define the terms of engagement and protect everyone involved.

But first, you need to agree on the exact scope of the work your dedicated team will do.

That’s why you need to sign a statement of work (SOW) before you sign the final contract. Here’s what a SOW typically contains:

source: PandaDoc

In short, a SOW defines everything the dedicated team will do during development and what you expect from them.

Having a well-defined SOW will prevent misunderstandings and ensure everyone is on the same page.

Finally, you need to decide on the pricing model for the project.

You have 2 options – time and materials or fixed price. Here’s a comparison between the two:

If you want to hear an expert opinion, we recently hosted Benjamin Huskic, founder of The Quality Gate, on The Roadmap and he shared his take on when to go for each model:

But, the time and materials model is the better choice when hiring a dedicated team.

It matches the actual work hours and resources used during development, so it’s the fairest for everyone involved.

It’s much more flexible, too – with a fixed price model, any changes to the original contract will cost you extra. And if your requirements change, that can add up quickly.

Once you’ve decided on the pricing model, you can sign a contract with the company.

And voila! You’ve hired a dedicated team and can kick-off the project.

How much does it cost to hire a dedicated team?

Finally, we’ll discuss the burning question – how much does it cost to hire a dedicated team?

Now, there’s no simple answer to this question.

How much you end up paying will depend on a number of factors, such as:

• Team size and expertise – Larger teams and teams with more senior engineers will cost more to hire.
• Project complexity – Complex projects with advanced features take longer to complete, which translates to higher costs.
• Pricing model – Depending on the pricing model you choose, costs can vary significantly.
• Geographic location – Labor costs and hourly rates vary widely depending on the country your development partner is located in.

The most important factor, though, is the team’s geographic location.

Here’s a comparison of the average hourly rates by role and region:

Average hourly development rates by role and region

If you’re a U.S.-based company and hire a team from Eastern Europe, for example, you’ll pay 2-3x lower hourly rates.

On top of that, you won’t have to deal with other costs associated with hiring in-house.

But, price isn’t the be-all and end-all. Like Warren Buffet famously said, price is what you pay, value is what you get.

So, don’t just go for the cheapest option since it will likely cost you more in the long run.

Dedicated software development team: FAQs

Need a dedicated team for your project?

Do you have an exciting project but can’t seem to find a company that’s the right fit?

Well, you’re in the right place.

We’re a full-service software development company and our dedicated teams have been building high-quality digital products for 11+ years.

So, if you’re looking for a high-caliber dedicated team, don’t hesitate to get in touch and we’ll arrange a quick chat to discuss your needs in detail.