When cooperating with an outsourced development team, your company has to consider more than just what vendor to work with. You also have to select the correct model of work.
In my nine years in the B2B space, and current position as Chief Business Development Officer at Code Inspiration, I’ve learned that settling on a model of work during the development strategy formation phase is critical.
This article will help you identify if you need a dedicated development team by following 5 steps.
How to Know if a Dedicated Development Team Is Right For You
- Understand models of work
- Know the best uses for dedicated teams
- Study a contract before signing it
- Know the short-term benefits
- Know the long-term benefits
1. Understand Models of Work
Traditionally, there are three distinct models of work for outsourced development:
- Time and materials
- Dedicated team
The three traditional models each provide different benefits for businesses. The infographic shown below describes each one in detail.
Working within a fixed price model is advisable if your project already has a defined scope of work. The budget for such a project is known and “fixed” in advance.
A time and materials relationship is normally used during dynamic projects. Here, the scope of work is supposed to be modified tasks that will be frequently reprioritized.
Time and material budgets are not defined before kick-off. Instead, invoices are filed based on the number of developer hours spent on the project’s iterations.
In a dedicated team engagement, a group of developers works on a project for a lengthy period, and the budget is set at a pre-arranged monthly rate.
Deciding whether a fixed price model is right for your business is fairly straightforward. If you have an already-defined list of tasks, proceed with a fixed price engagement. Doubt normally creeps in when you’re deciding between a time and material format or a dedicated team format.
2. Know the Best Use of Dedicated Teams
Every product development process and business is unique. Projects with an uncertain development timeline involve risk and might fit well inside an easy-to-scale time and material engagement. That way, you’ll only be charged for the hours spent on your project.
If you’re confident in predicting a full load for all team participants, consider these five other questions for working with a dedicated team:
- Is your project is going to be long-term?
- Are you confident there will be a sufficient workload for the development team?
- Is your business is already fully-functioning?
- Will your product require ongoing maintenance?
- Is the project is complex?
If you have answered “yes” to three out of these five, then hiring a dedicated team is probably a good choice for your business.
3. Study a Contract Before Signing It
Before signing a contract, read the developers' portfolio and work through a test project to ensure you’re operating on the same wavelength. If you feel confident enough to proceed, consider including these ideas in your contract:
- The names of the selected developers. This will help you to retain the same people throughout your project.
- A two-month notice period for team member changes.
- Hour tracking for time spent on your project by each team member. This can be achieved by requesting access to the vendor’s management tool. Outsourcing teams usually use Jira, so you can monitor daily work and add comments to participate in the process.
- Transfer of the source code to your server.
- Weekly calls with your project manager for updates.
The recommended term for a dedicated team contract is 1 year. I also recommend locking in the per month price for the year in your contract. This stability will allow you to concentrate more on business strategy.
4. Know the Short-Term Benefits
When you’re working with a dedicated team, you can expect certain benefits immediately:
- You’ll have a team working exclusively on your project, driving the risk of critical issues down with their knowledge of the details.
- You’ll be working the same developers long-term. If a change is necessary, it is easy to ensure that critical knowledge is transferred.
- You’ll be able to plan your budget, as is known in advance.
- You’ll be able to save 10%–30% per month on your budget
Make sure you ask yourself the right questions if you're weighing the short-term benefits of a dedicated team. This flowchart explains how to evaluate a dedicated team.
Booking a team as a unit will always be more affordable than paying for each team member separately at their hourly rate.
5. Know the Long-Term Benefits
If your software needs ongoing maintenance and development, applying a time and material option means that you’ll have to sign a service-level agreement (SLA) at additional cost.
A dedicated team working exclusively on your project will assist you in maintaining the project and developing new features without an additional fee (no SLA).
If there’s an urgent issue, they’ll reprioritize their tasks and resolve the urgent issue first. Then, they’ll return to their previously assigned jobs.
If your business takes off one day and you need to scale the team, it is always possible to do so with a dedicated model. Simply send a request to your outsourcing company.
Developers who are already working on the project will help new team members avoid issues, as they already know the specifics and the architecture of the project itself.
Outsourcing Is a Big Decision
Hiring an outsourced team is a serious decision. Therefore, it’s necessary to carefully consider which type of outsourcing model is right for your company.
Depending on how flexible your scope of work is, as well as the likelihood of the product needing ongoing maintenance, a fixed price model or a time and material model may be the right fit.
On the other hand, if you know you’re going to require ongoing maintenance, a dedicated team may be the best option.
When a dedicated development model is applied properly, it provides businesses with two main benefits: financial stability and product development stability.
Once you’ve decided to go with a dedicated team, all you need to do is draw up a thorough contract. After that, you can start reaping the benefits of your decision.