Dedicated software team – definition, pros, and cons

11 min read
July 13, 2022

The app market is becoming more competitive than ever.

A study by Appinventiv revealed that over 3,739 apps are added daily to the Google Play Store. That’s a lot of stiff competition for any apps that want to stand out.

Unfortunately, the traditional approach of having in-house developers isn’t always the best option in this fast-paced environment anymore.

To survive, you need a faster way to build, test, and launch quality apps.

Enter the dedicated team model.

The concept is simple: form a remote team of specialists with skills that are 100% relevant to the task at hand.

Let’s talk more about this concept.

What are dedicated software teams?

A dedicated software team is formed by a third-party agency or service provider. It functions just like an in-house team and handles the project from start to finish.

The only difference is that a dedicated team is an external entity.

However, unlike an in-house team, you don’t hire members of a dedicated team.

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Instead, you partner with an agency with a ready talent pool to assemble one based on your requirements. In many ways, it’s a bespoke team that’s 100% compatible with your project.

In most cases, a dedicated team can be managed directly by the client company via an assigned project manager.

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Dedicated teams are similar to, but not quite like, extended teams. As the name suggests, the latter is an extension of your in-house development team.

Usually, they are formed to assist the main team and cover any skill gaps. They’re not meant to develop a project from scratch.

How dedicated teams price their work

Pricing is an important consideration when hiring a dedicated team because it will impact your potential cost savings.

There are two possible models here—a fixed price and time-and-material pricing.

paying

Fixed price is where you decide on a set rate at the beginning of development.

The price is often based on the project’s requirements, including the time and resources needed for completion.

The fixed price model is suitable if the project’s scope and requirements are predictable. Some clients also prefer it to avoid overpayment.

However, the fixed price is extremely rigid if there are changes in the app’s requirements (which happens most of the time).

In these cases, either the developer does extra work for free, or the client accepts a subpar output—a lose-lose situation.

Here are some other drawbacks of the fixed price model:

fixed price project risks

Source: Cleveroad

In contrast, the time and materials model bills the actual time and resources spent by the development team. This is usually done at an hourly rate.

The best thing about the time and material pricing model is its flexibility. This is perfect for app development, where scope and requirement changes are the norm.

It’s also faster since you don’t need to spend as much time drafting requirements as with fixed pricing.

Overall, the time and material model creates fairer pricing for developers and clients.

However, there are also disadvantages you need to watch out for.

Pros and cons of a TM contract

Source: Imaginary Cloud

The biggest risk with this model is going over the budget. In fact, you’ll find that this will happen more often as requirements change across the project.

If you’re sensitive about costs, be wary of requesting too many changes, as this is an added expense.

So, which pricing model should you pick?

The time and materials model is the superior choice for complex app projects with a large or undetermined scope.

It can deliver a better quality app in a faster time frame, with less stress and fairer pricing on both sides.

On the other hand, simpler app projects with well-defined requirements benefit most from the fixed pricing model.

For example, this model works well if you already have an approved prototype and just need a development team to code it.

Pros and cons of dedicated teams

Dedicated teams aren’t perfect. While they offer huge advantages, there are certain downsides to using them. We’ll go over both in the following sections.

Pro: it can be cheaper

One of the biggest reasons to hire a dedicated team is that it’s much more cost-efficient. There are two main reasons for this.

One is that you have a global talent pool to tap, giving you a wider range of prices to suit your budget.

For instance, a developer from Eastern Europe can ask for a lower price but with a comparable quality to that of American or Western European developers.

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The other is avoiding the extra costs of hiring an in-house developer. See, payroll costs aren’t just about salaries alone.

You must also worry about onboarding, equipment, benefits, and training.

For instance, a study by the Society for Human Resource Management estimates that companies spend an average of $4,100 to onboard a new hire.

Con: integration and security risks

Since a dedicated team is effectively an outside entity, it could introduce security risks if you’re not careful.

For example, transferring files from their network to yours can subject the data to hacks and theft.

The solution here is to ensure your dedicated team has the same strict cybersecurity measures as you.

Pro: access to a wide range of skills

Having a dedicated team gives you access to a wide range of skills that would be challenging (and expensive) to maintain in an in-house team.

This is especially crucial if you need specialists only for specific projects.

For example, suppose you’re creating your first fintech app.

You probably don’t have a finance expert or compliance professional on your payroll, but if you partner with a company from the finance sector to form your dedicated team, they can help source it for you.

Con: communication and coordination issues

Of course, the dedicated team model isn’t perfect. One of the biggest issues many companies face is communication and coordination.

Most dedicated teams work remotely, so the company’s communication protocols must be on-point.

Then there’s the problem of different time zones, which can complicate coordination. The culture and language barrier are also potential obstacles.

Fortunately, this can be overcome with careful planning and the right methodologies. It’s for this reason that we prefer an Agile approach to development when doing projects.

Pro: it makes you flexible and adaptable

Dedicated teams are highly flexible in nature, enabling you to tackle a wide variety of projects in different niches.

For instance, relying only on the human resources within your company, it would be difficult to develop a fitness and personal finance app simultaneously because each requires specialized skills.

You’d need to hire a large in-house team to do so.

But with the dedicated team model, you simply create a team from scratch. That gives you the best chance for success because teams are built to be 100% compatible with the project.

Pro: fast turnaround time

Dedicated development teams are the secret weapon for building complex apps just when you need them.

You skip the hiring and sourcing process, which can otherwise take weeks or months. Just look at the average timeframe for interviews alone in the US and India:

average timeframe for interviews alone in the US and India

Source: Pesto Tech

In contrast, dedicated teams can be much faster to put together (assuming you partner with an experienced firm).

This is especially true for companies like DECODE that already have a ready pool of talent.

Also, if you hire the right team with the right expertise, there’s no need to train them. This means they can build your app much faster, giving you a competitive edge in the market.

Who are dedicated teams best for?

While dedicated software development teams are fantastic, they’re not for everyone. Here are a few guidelines on when this is a viable path for your project.

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Generally, dedicated teams are suited for complex projects with vague requirements that tend to change over time.

Timeframes should also be longer so you can maximize the traction created by a dedicated team.

That’s why they’re a great solution for startups in the early stages. Mostly, these companies tend to be very experimental with their app idea and thus require rapid pivots during development.

An adaptable dedicated team is a great way to still deliver products cost-effectively on time.

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Source: DECODE

Conversely, hiring a dedicated team would be a waste if your requirements are clear and unchanging.

In these cases, hiring a team of developers or even individual freelancers is a better option.

How dedicated software teams work

As we mentioned, a dedicated software team functions just like an in-house team, only they operate remotely.

To give you an idea of what this looks like in practice, let’s take DECODE’s dedicated team workflow as an example.

The Decode process

Source: DECODE

When you first get in touch with DECODE about a possible project, we start with a consultation call.

We take time to know the requirements of your project and estimate the time and resources needed.

Once you decide to work with us, we’ll form a dedicated team pulled from an internal pool of 70+ experts with various skillsets. You’re guaranteed a team that’s 100% fit for your requirements.

We’ll then do a further discovery call to determine the exact requirements and flesh out daily goals and milestones.

Once all of the preparation is done, we proceed with building the app, starting with wireframing, design, and development. We also do regular QA and testing.

During this stage, we communicate regularly with the client on the project’s status, depending on their preferred level of involvement.

For more involved clients, we use the Agile methodology. The project is divided into small parts subject to multiple review and testing rounds.

As a result, clients can see and give feedback on their apps throughout development.

Decode screenshot

Source: DECODE

On the other hand, if clients simply want to see the final app with minimal involvement, we use the waterfall methodology.

Here, the project is divided into steps, each building on an earlier one until the project is delivered to the client.

final product delivery waterfall

Source: DECODE

Once we’ve launched your app, we can still assist you with maintenance and analytics as needed. The team is fluid, so we can remove or add expertise as required.

For example, if you want in-depth analytics, we can include someone with that expertise.

But it’s important to note that the client has 100% ownership of the app’s code. We guarantee to comply with the IP and legal frameworks in the EU.

Famous products developed by dedicated software teams

The dedicated team approach is so effective that many high-profile projects were delivered using it.

One example is the communication platform Slack. In 2013, founder Steward Butterfield formed an outsourced team to build most of the platform, including the web and mobile apps, logo, and marketing assets.

Slack screenshot

Source: Slack

The messaging service WhatsApp was also created by a dedicated development team from Russia.

At the time, it was a smart financial move by the firm (which only had a small group of 30 full-time and five part-time staff) to keep costs down.

It paid off, as WhatsApp now has over 2 billion users across 180 countries.

whatsapp featured

Source: WhatsApp

The last app example is one proudly built by the DECODE team. It’s a fintech app for the Asseco Group, one of the leading banking technology providers in Eastern Europe.

The project was a mobile banking solution with modern features like a mobile wallet, tight security, receipt management, and currency exchange.

You can read the Asseco case study here.

asseco second mobile screen

Source: DECODE

There are hundreds of other apps out there that use the dedicated team approach to great success. That shows you how effective the model can be.

Need a dedicated software development team?

After reading this article, we hope you’ve realized the value of having a dedicated software development team.

However, know that you can only see the benefits if you form the right team. And we believe the team at DECODE is exactly what you need.

For the past ten years, we’ve built a pool of over 70+ experts with diverse skill sets and experience. So whatever app requirements you have, we can tackle it!

Interested? Drop us a line, and let’s talk!

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Written by

Marko Strizic

Co-founder and CEO

Marko started DECODE with co-founders Peter and Mario, and a decade later, leads the company as CEO. His role is now almost entirely centred around business strategy, though his extensive background in software engineering makes sure he sees the future of the company from every angle. A graduate of the University of Zagreb’s Faculty of Electrical Engineering and Computing, he’s fascinated by the architecture of mobile apps and reactive programming, and a strong believer in life-long learning. Always ready for action. Or an impromptu skiing trip.

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