Outstaffing and outsourcing help more and more startups, enterprises, and even tech giants engage the best talent and create competitive software solutions faster while cutting costs.
Offshore outsourcing comes with the most significant savings. For those who choose to outsource, dedicated teams worldwide offer help with research, software design, web and mobile development, quality assurance, maintenance, improvements, and more.
This article may be of interest to CTOs, CEOs, and Chiefs of Innovations of startups, product development companies, or non-tech enterprises that need to delegate their software projects and jobs. It defines a dedicated software development team, lists its advantages, and explains when it works best.
If this approach seems suitable for your organization, there are some practical tips to help you hire an offshore dedicated development team in three simple steps.
The term refers to a type of remote collaboration between:
The client hires a remote software engineering team from a vendor to perform a particular task, e.g., create the UX and UI design, write the code, ensure quality, maintain and improve the system, etc., on a long-term basis. More often than not, a cross-functional team is required to complete a project.
‘Dedicated’ means that the personnel works full-time for only one client, is completely immersed and exclusively focused on the current project, and can’t be switched to another.
The vendor takes care of assembling the team from the ground up. They hand-pick candidates with the required skill sets, experience, and salary rates suitable for the client. Once the candidates are approved, the client and vendor agree on a monthly fee for each specialist.
The agreement associated with dedicated software development teams is called a Cost+ contract. It records the client’s requirements, project roadmap, deadlines, and budget.
Once the contract has been signed, the remote specialists become a part of the client’s workforce allocated to the project, although working out of the vendor's office. They are accountable to the client as if they were full-time employees, can access their databases and administration systems, if needed, and attend general online meetings related to the project.
Unlike freelancers, dedicated software developers take full responsibility for the project, usually work as a unit, and won’t cooperate with in-house programmers.
Dedicated software development teams are mostly self-managed but can be run on the client's side. The client usually can contact each remote team member, evaluate the workflow, and monitor daily activities and overall progress directly, via the project manager, or both.
Establishing the workflow, sharing the project requirements, and synchronizing the external and internal teams rests on the client.
The vendor provides the remote dedicated software development team with office space, necessary equipment, software, and administrative support. They also handle the recruitment, training, payroll, social benefits, taxes, team building, and related issues and expenses.
The pricing model is simple: each worker’s hourly rate is fixed, and the client pays for the recorded hours. The monthly payment comprises these wages plus the provider’s fixed fee.
The collaboration with an outsourcing development team typically lasts over 12 months. Once the project is over, so is the cooperation.
The client can be sure that they get talent specially selected according to their standards for their unique project. They can personally interview each candidate, say, on Skype. The vendor will also offer a trial period for each team member. If a specialist fails to meet the client’s expectations, the vendor will be responsible for finding new eligible candidates.
Moreover, these experts will concentrate their efforts on the client’s success. They will be working on it full-time daily, without any distractions. When clients put forth urgent queries or modifications, a dedicated team will be more likely to act promptly, even at odd hours.
A vendor can recruit a team of dedicated software developers within days or even hours. You can avoid posting multiple job advertisements, screenings, rounds of interviews, the pain of choosing, signing individual contracts, and lengthy onboarding.
The vendor selects the best fits for all essential roles from their pool of well-trained specialists experienced in executing projects in a particular domain. Having the best professionals from the start helps achieve the project goals faster. Moreover, the team members are usually accustomed to working together, which further speeds up the development process.
Exempt from any hiring hassle, paperwork, organizing workstations, administrative and other issues, a company’s management can free up time and energy and focus on the core business processes and growth ideas.
The outsourced development team model is flexible. Clients can change the requirements and project scope on the fly, experiment with and balance the workload, and quickly build the team up and down according to the current business goals.
If the initially agreed group is not enough to complete all the tasks your project requires, you can ramp it up at any time. Outsourcing agencies have ample human resources that allow finding the best extra hands or substitutes immediately, although typical contracts stipulate the notice periods within which the client should request it.
If you decide to scale the team down, it will be the vendor’s responsibility to allocate the redundant specialists to other projects and handle all related issues.
You are also free to determine the scope of your involvement in project-related processes. For instance, you can share the decision-making or delegate some decisions to a trusted team.
Outsourcing solves the problem of limited budgets or local labor shortages by providing access to the best experts worldwide. You can expect more effective problem solving and better code after hiring better programmers or experts in cutting-edge technologies that you wouldn’t recruit in your area with your budget.
You may be able to fill those roles you might otherwise omit, such as experienced PMs, product owners, or testers. All these experts are key to ensuring the high quality of digital products. Outsourcing also increases your capacity to innovate.
By screening outsourcing agencies from all over the world, you can select the most cost-efficient offers. Due to the gaps between IT professionals’ salaries in developed countries and emerging economies, your remote software engineering team can deliver more value for the same money.
You eliminate the expenses associated with in-house IT departments, such as benefits packages, office rent, equipment, software licenses, electricity bills, administration, training, and more. Additionally, the vendor relieves you from the recruitment and onboarding costs.
A US-based company reportedly can save over 50% on IT costs by hiring an offshore dedicated development team in Latin America, Eastern Europe, or South Asia compared to in-house developers, and around 20-40% compared with other outsourced development models.
Knowing the hourly rate of each dedicated team member, you can plan the project budget more accurately. It becomes more predictable, transparent, and easier to adjust in the course of the project.
Running an offshore development team comes with its challenges, but time differences typical for this cooperation model may prove to be beneficial. You can plan the work of two or more teams in such a way that your operations will be going day and night.
A dedicated team that works on a project for at least one year acquires a deep understanding of the clients’ requirements, the product, and its niche. The team members hone their skills, share and grow the product knowledge every day, and accumulate it throughout the cooperation. If the project team line-up changes, you can be sure of a successful knowledge transfer.
1. The dedicated software development approach is most suitable for complex long-term projects with fluid requirements when there is no clear vision of the final goal and the scope, budget, and timeline may change at any time.
2. In regions with high software development rates, businesses can save money by recruiting developers elsewhere.
3. If you’re an early-stage startup expected to grow, an external dedicated team will help you build your product faster while saving money.
4. If you are a small- or mid-sized non-digital business, creating a full-fledged IT department to help digitize your processes may be impractical. An external dedicated team can both realize your software development ideas at a lower cost and advise you when needed.
5. The dedicated software development model is great for product ideas that need a discovery stage and validation. You can go through the crucial phase with minimum investment, while an outsourced development agency’s expertise will increase your odds of success.
6. A remote dedicated software development team can help when you already have an in-house or remote unit building a product but need a workforce boost.
7. Companies also tend to hire remote dedicated software developers when their in-house team lacks the required skills or expertise for short-term projects, or they have difficulty finding local tech talent for new projects or tasks: it’s hard to find a valuable worker quickly, especially if you offer only short-time employment.
8. This approach is also suitable for a side IT project when you don’t want to distract the internal team from their core tasks.
9. There are seasonal jobs even in the digital area, and sometimes, you need to hire workers only to dismiss them shortly. The outsourced dedicated development model allows ramping resources up and down painlessly.
10. It also solves the problem of recruiting developers within tight timeframes, e.g., when more hands can help meet an approaching release deadline.
11. When a business grows, scaling its systems up and down and adding features while ensuring smooth operation becomes increasingly demanding for its in-house team. An entity can hire an offshore development team to take over the heavy lifting and help maintain stable performance.
12. A specialized dedicated team can help with all aspects of redesigning a web or mobile app, from ascertaining the project’s goals to updating the existing features.
First, an organization or entrepreneur has to formulate their business goals, timeline, and project scope: these will determine the composition of the future offshore development team.
For example, a dedicated team may include, but not be limited to, the following roles:
Depending on the digital product specifics, an extended dedicated software team may also include additional experts, such as:
… and more.
If you do not have any experience, your future outsourcing partner will help you figure out the team’s structure, the number of persons for each position, the skills they should possess, and the required level (junior, middle, or senior developer). However, to do so, the vendor will need at least a list of your products’ features and your goals. The more information about the product and the client, the faster they will build a dedicated team that fits both technically and culturally.
Once you have documented your requirements, it’s time to look for outsourced software development providers.
The price of software development services primarily depends on the region where the provider is located. Two outsourcing approaches can be distinguished:
1. Nearshore software development occurs in a closer time zone and geographical proximity to the client’s location.
2. Offshore development undertaken by foreign companies far away from the client is associated with significant time and cultural differences but normally greater savings.
For companies operating in North America, Western Europe, Western or East Asia, or Australia, the most popular IT outsourcing destinations remain pretty the same.
For example, Eastern Europe is an alluring outsourcing destination due to the optimal price-quality ratio and vast pools of world-class tech talent. The average software developer’s salary in Ukraine or Romania is 2-3 times lower than the salaries of their counterparts in the US or Western Europe.
Once you have decided on your preferences regarding developers’ hourly rates and time zone, narrow down your search to one country. The selection criteria may include the prices, availability of the required tech talent, whether you know the country’s language, the level of the workers’ proficiency in English, cultural compatibility, local business climate (regulations, taxes, and any introduced sanctions), and other aspects.
For instance, IT professionals in India are known to charge some of the lowest fees for outsourced services, and English is their default language.
Once a suitable location has been identified, you can Google outsourced development providers in the country. The easiest way is to search on popular aggregators, such as Clutch, GoodFirms, ITFirms.co, TopDevelopers, etc.
When looking through potential outsourcing partners, pay attention to
Shortlist 4-5 most suitable options and examine them closely. Every single detail matters. For instance, the rates of Ukrainian outsourcing agencies differ depending on their size, expertise, years on the market, and even location. The IT professionals’ hourly rates in Kyiv will be understandably higher than in a smaller software development center.
The following tips can help you make the next choice:
Start the negotiation by asking the service provider to show you their typical contract. Learn under what conditions the company usually works, and if needed, ask a lawyer to take a look.
From your first interaction with the vendor’s representatives, take notice of the company culture, communication style, and the ability to meet your requirements. In your turn, try to be open too.
Before discussing your project, goals, and needs, have the vendor sign a non-disclosure agreement. It will oblige your potential outsourcing partner to keep secret not only technical developments but also your ideas and any sensitive business information. It should cover your intellectual property, data collection, transfer, access, etc. There should also be an option to sign an NDA with each remote team member.
Ask about the agency’s information security policy and how it complies with the GDPR, ISO, PCI, HIPAA, or other applicable standards when building certain products. Discuss the use of best practices and measures to prevent any security vulnerabilities from the onset.
If the vendor has met your requirements so far, you can share and discuss your ideas and documents disclosing the scope of the project, its goals, roadmap, working principles, tech stack, etc. Once the vendor has understood their task, they can proceed to setting up a team for you.
Typically, they would offer one or more vetted specialists per position. You can review their CVs, send some practical tasks, and interview shortlisted candidates during a video call.
After selecting the specialists for all roles, the vendor and the client approve their salaries and the vendor’s fee for the entire collaboration period. The contract you sign should clearly describe:
Agree on the specifics of managing the software development process on your side or the vendor’s, monitoring, regular communication via several channels, and coordination across different time zones to ensure transparent and smooth cooperation.
Approve a plan of action in case of a failed deadline, inadequate quality, intellectual property infringement or abuse, data breach, emergency, etc.
We hope these tips will prove helpful when you hire an offshore development team to realize your ideas or help grow your business. If you’ve read this far, let us tell you how Onix does it.
Onix’s clients, both well-established companies and aspiring startups, usually seek specific expertise or aim to launch a product as quickly as possible while optimizing costs. To this end, our company can offer:
Onix has been providing custom software development services internationally since 2000. It has successfully realized hundreds of projects while overcoming thousands of technical and business challenges. The majority of these projects were implemented by dedicated software engineering teams.
Adoric and Learning Pool are just a couple of examples.
Most specialists possess expertise across two or more industries, such as e-commerce, enterprise resource planning, healthcare, fintech, education, entertainment, social networking, travel, games, and many more. You can see more examples of our work on Onix’s website.
Clients can choose their remote team members from nearly 300 qualified web developers, Android, iOS, and hybrid mobile developers, UI/UX designers, QA engineers, DevOps specialists, solution architects, and more.
Onix’s employees specialize in cloud technology, DevOps, big data, artificial intelligence, machine learning, AR, VR, and other tech domains.
Clients normally entrust assembling their extended/dedicated development team to Onix’s HR group based on their successful experience. We conduct practical tests to vet candidates for each particular project so that each client gets the best-in-class professionals with proven expertise and experience in relevant industries.
Most clients also prefer to delegate the team management to Onix’s PMs and Scrum Masters. For over 20 years, they have been perfecting handling workflows, time zones, communications, and cultural differences, as well as their English skills. Communication through video calls, daily stand-ups, live chat, and emails adapts to each client’s requirements. Clear shared goals, regular communication, and consistent progress tracking help clients stay in control.
Onix adheres to the Agile approach which speeds up the development of quality products. Dedicated teams build software in small increments through recurring short development cycles. This ensures flexibility on projects with fluid requirements. Teams also continuously monitor user feedback and other metrics and KPIs to improve products and reach the product-market fit.
Onix provides reliable technical infrastructure, support, and continued education. On-demand team scaling is available without any recruiting, administrative, or training costs to the client.
Cut-throat competition, persistent need for innovation, and even the COVID-19 pandemic have forced more and more companies and startups to work remotely and farm out their software development projects and jobs. Dedicated software engineering teams provide an excellent solution associated with faster development kick-off, flexibility, scalability, high quality, and significant saving of money and effort.
If you are looking for an extended/dedicated software team or have any questions, please feel free to contact Onix now. We’ll be happy to help.