Team Expansion VS Dedicated Development Team
In today’s fast-paced, technology-driven business world, the demand for talented IT specialists is higher than ever. Not only does fast access to the right technical expertise allow you to quickly respond to market changes, but it can also help your company stay on time with key development projects.
However, hiring an in-house development team is quite costly and requires much time and resources. The total cost of hiring a new developer is equivalent to a few months of their salary, that’s why IT outsourcing seems like a gateway to success for tech companies. However, reduced cost is not the only reason for hiring an outside team.
There are various models of cooperation with a software provider to choose from, where team expansion and a dedicated development team are considered to be the most popular. Let’s compare the advantages of each model as you consider the most beneficial approach for your development project.
Team Expansion VS Dedicated Team Compared
It should be mentioned that in both models your company benefits from the worldwide talent pool since your choice is not limited to specialists in your region. This means that with outsourcing, you get immediate access to some of the best IT professionals that you can find.
Team Expansion Model
Team expansion is a type of outsourcing software development services, where a software company provides their specialists in the form of external hire, usually on a Time & Materials contract basis.
Thanks to the team expansion model, your company can minimize costs related to recruitment, payroll services, and project management. This model is also scalable – it’s much easier to scale up and down the development team in contrast to an employment contract. Furthermore, this complete shift of responsibility allows you to reduce formalities with HR and employment and focus more on the core business.
Dedicated Team Model
The dedicated team model is a type of outsourcing where you hire an entire remote extended development team and hand over the project to them. The outsourcing company of your choice forms the dedicated team, but it also includes a Project Manager, which reduces the need for hands-on management by the client.
This model implies a much broader partnership than just team expansion, as it also covers a vast variety of software-related services such as business analysis, design, UI/UX design, quality assurance, project management, support, and maintenance. In contrast to team expansion, in the dedicated team model, the software service provider is deeply involved in the development process so their incentive to deliver the best possible result is higher. In fact, the software vendor acts more like a close and trusted partner rather than a temporary service provider.
If both models offer more or less similar advantages, what model should you choose? Let’s take a look at a short comparison of the two models.
Costs and Responsibilities
On the surface, these two outsourcing models may seem similar. In both models, the service provider is in charge of the recruitment and employment of software developers. However, in the dedicated team model, the provider also bears the expenses of office maintenance, software licenses and hardware purchasing, employee education, etc. They also take care of the developers’ overall motivation and end results.
In the team expansion model, the client is in charge of project management, even though the product is built by external employees. In a dedicated team, there’s an internal project manager, which reduces project management responsibilities on the buyer side and assigns the full management responsibility of the project to the provider.
Another advantage associated with external project management is the software vendor management system. It is an organizational system of rules, processes, and procedures that guides a business to achieve its goals and ensures that it is effectively used to support those goals. An expert software development provider already has a well-thought-out effective way to work with IT projects, has some similar partnerships in its portfolio, and simply knows how to get things done.
Relationship With the Outsourcing Company
There can be no fruitful business partnership without a solid foundation of mutual trust and mutual understanding. When outsourcing a dedicated development team, companies usually create a long-term and permanent business relationship. A close partnership allows you to better understand the real needs and challenges that your company deals with. Without trust, it is difficult to avoid frustration and discomfort in day-to-day work.
In the staff expansion model, the relationship with the IT outstaffing company is shallower and is confined to simply providing the required number of developers. This kind of business relationship often ends with the last line of code, and so it’s not deep.
In the team expansion model, it takes slightly less time to start project development. However, there is a risk that the client won’t be able to accurately identify the candidate profiles, skills, and technical experience required for the project, and therefore it will have to hire an expert either internally or on the outsourcing company’s side. Without this, the kick-off may take more time and cost more.
With the dedicated team development model, it is the sole responsibility of the software outsourcing company to form a development team for each project, scale it according to the client’s current needs, and ensure smooth management of the development process. The role of the outsourcing company is focused on determining the scope of the project and its functionality, instead of determining the personal preferences regarding developers.
Insights and Knowledge
With staff expansion, software developers may lack knowledge about your company, your projects and products, your previous business experience, or industry insights. So you can’t expect them to be as active or innovative as in-house employees.
In contrast, with a dedicated team, the software outsourcing company establishes a close relationship that allows you to handle your needs in a personalized way, and developers have more opportunities to dig deeper into your business and learn about your true needs. However, no matter what model you choose, a good software development partner will come up with initiatives that can give your company a competitive edge.