Dedicated Software Development Team: Why It Is a Good Idea

A growing business may come to the point when it is necessary to enlarge the number of employees. If you need more people to create some software, there are two common ways. The first one is to extend an in-house team and another – to outsource this process to a dedicated software development team.
In this article, we are going to outline the pros and cons of building a dedicated software development team and conditions when it will work out and when not. We will also look at stages of starting this kind of team and at a couple of vital documents for this type of cooperation.

At first, let us look at what an in-house team is. It is an internal development team, which works, primarily, together with an employer in the office. This type of team has a range of advantages:

  • Instant communication and agility – an in-house team can discuss any issue the same moment it appeared without leaving a room or writing long e-mails. Direct communication saves time and avoids misunderstandings. The team also is more flexible in changing requirements and project features.
  • Cultural fit and engagement / involvement – working in the same office means sharing a similar local culture. Developers have more information about the company’s business needs.

But an in-house model also has some drawbacks:

  • High costs – paying salaries to in-house developers is much higher than delegating the development process to an outsourcing vendor. You also have to pay office rent, hardware, software, sick leaves, taxes, etc.
  • Lack of skilled IT specialists – if you need a developer in a narrow specific area or a number of IT experts that’s not so easy to find them in your area and do it quickly (at least sooner than 2-3 months).
  • Recruitment – this process may be both time- and money-consuming.


Why do companies outsource? The mentioned above issues are among the reasons to outsource software development. According to statistics, 35% of companies use IT services outsourcing to allow in-house specialists to focus on the high-priority processes, 24% of companies expect an efficiency boost, and 18% – to get help from a professional.

Building a dedicated team implies that you hire developers who will work for you full time from the outsourcing vendor’s office but will report personally to you. These developers may make up your entire development team or cooperate with your in-house developers. Another name of this model may be IT staff augmentation or IT outstaffing. Either you own a mature business with specific business goals or a startup – a dedicated software development team may become a suitable decision for you.

There are three outsourcing models of cooperation between a customer and an outsourcing provider – dedicated team, time & material, and the fixed price models. A dedicated team model enjoys the greatest popularity.


What are the benefits of outsourcing software development?

  • Costs saving – reduce your expenses on recruitment and salary budget of full-time employees.
  • Scalable team size – if your product has changing requirements you can easily match a number of hired developers or other specialists to its needs. For comparison, hiring developers for an in-house team is long-lasting and firing may cause harm to team morale and reputation.
  • Established processes and additional services – an outsourcing company often provides additional services like quality assurance, UI/UX design, project management, DevOps, etc. You get the possibility to hire not only developers but a whole team of various IT specialists, fully concentrated on your project needs and goals. Often these people have been working together before and are aware of the essential processes, so they will provide effective cooperation.
  • Access to a large talent pool – delegating an outsourcing company to build a software development team, you achieve access to senior developers, specialists with unique talents and expertise.
  • Full control over your project – direct team management implies plenty of daily communication without intermediaries. It looks like cooperation with an in-house team working from another office. This will give you an understanding of which tasks your team works on and their daily progress.
  • Flexibility in project priorities – having full control over your project makes it possible to adjust to altering needs of the product or business goal fast without looses in the quality of the delivered product.


Building a dedicated team has some threats as well. But they may be avoided if choosing a trustworthy vendor.

  • Limited control of a dedicated team – a minimum of live face to face contact may cause some misunderstandings or gaps, but if the team sticks to project management standards with daily communication, it can be avoided.
  • Language and culture differences – it requires a little bit more effort to find a common language with people from other countries. But in general, developers from the EU, the US, and from Eastern Europe have similar cultural values. The latter also have high English proficiency.
  • Time zone differences – if your time difference with a dedicated team is more than 6-7 hours you will have few overlapping working hours. This may cause delays in bug fixing, tech support, and cause inconveniences when urgent tasks appear.
  • Lower motivation – it is more challenging to monitor the motivation and engagement of an outsourced team.


If you still hesitate which model (in-house or dedicated) will suit your needs better – think about your business needs and evaluate the risks. And ask yourself a question ‘Is a dedicated team model team suitable for my business?’ The answer will be “Yes” if:

  • Your project is a large or long-term With a great volume of tasks in the workflow, a dedicated team will cope with changing requirements and provide high quality on all stages of a software development life cycle.
  • You are going to extend your project or go to new markets. If you expect your project to grow, a dedicated team is a good decision that will help you to build a team, skip tiresome recruiting and hiring procedures. You will also be able to choose developers by yourself.
  • The freedom in changing project requirements is highly important
  • You plan to get a minimum viable product (MVP) as soon as possible
  • It is necessary to influence the quantity of the software developers in the team
  • You want to get programmers with the required expertise in a short period of time
  • You would like to provide your in-house developers with more time for some key tasks or functions.


There are a few situations when delegating work to dedicated developers will not be the best solution. In the following cases you should better choose another cooperation model (time & material or fixed price) or another vendor:

  • Strict limits on time and a project’s budget
  • A small project without complex architecture
  • there is already an elaborate backlog and desirable technologies for the project
  • doubts concerning outsourcing company reliability.

What kind of programmers and IT specialists will you need to build a dedicated software development team? Сommonly it consists of:

  • front-end, back-end or full-stack developers
  • QA engineers
  • UX/UI designers
  • DevOps engineer
  • business analyst
  • project manager, and others.


So, a dedicated team is also flexible and straightforward in terms of scope, time, and costs.

The ability to change scope of work, priorities, and quickly adjust to new requirements is a distinctive trait of a dedicated team. It is enabled by your direct communication with engineers and your prerogative to decide on a workload of the project.

Transparent communication with a vendor allows you to set clear deadlines and the way they will be handled.

This outsourcing team model makes it easy to plan your budget for a month, a quarter, or a year. Accurate cost tracking is enabled by a clear understanding of what you pay for – monthly salaries of the dedicated team members and the outsourcing company’s fee (administrative, infrastructure expenses, and overhead).


Outsourcing companies usually have well-established processes of building a dedicated software development team – from gathering requirements to developers’ on-boarding. At SharpMinds this procedure covers the following steps:

At SharpMinds we recognize the legal aspect as one of the fundamentals of outsourcing cooperation. An essential part of hiring a dedicated team is a Non-Disclosure Agreement (NDA). This document establishes a confidential relationship and its purpose is the protection of customer’s confidential business information. NDA outlines what information is restricted to reveal to any others and what consequences of breaking an NDA are foreseen.

The document known as Statement of Work (SOW) provides a detailed description of the project’s work requirements – scope and location of work, a period of performance, the deliverables and their schedule, industry specific standards, acceptance criteria, schedule of payments and any special requirements.

Master Services Agreement (MSA) describes terms of cooperation among you and an outsourcing vendor. The document typically specifies the following terms: payment terms, product warranties, intellectual property ownership, dispute resolution, geographic location, and venue of law.


Here is a piece of advice if you are building your first dedicated team:

  1. Try to meet your dedicated team in person. Face-to-face communication facilitates to build a supportive and trustworthy relationship and enables effective long-lasting cooperation.
  2. An advantage is when dedicated developers have knowledge about the business context before the start of development. So share this information with them, as it will encourage their involvement, add to focus on the company’s goals and effectiveness of work.
  3. Discuss and clear with your in-house team all the doubts about their competence, explain that there is no intention to replace them with a dedicated team. This will help to avoid unhealthy competition between an in-house and dedicated team in the future.
  4. An essential prerequisite for fruitful cooperation is constant and fair feedback from you or your product owners. It should be a two-sided game.
  5. Remember, that both teams are made up of skillful specialists you have chosen Try to perceive and treat them like equal ones. Also, it is pleasant to hear praise, especially when it is a deserved one.
  6. “Do what you do best and outsource the rest”. You should have a clear vision of which expertise you need from an outsourcing company and a dedicated team.
  7. If you are up to establish long-term cooperation with a dedicated team, be ready to invest not only your money but your time and effort as well.


So, let us sum up the key features of a dedicated team model of cooperation:

  • It is a way to add lacking expertise to your development team
  • Suits for long-term projects
  • Enables to plan and predictable expenses accurately
  • The team is focused on your project’s goals
  • A cost-effective and time-saving solution
  • Tight communication
  • Requires loads of your time and effort which results in a great product.


If you ready for this journey – write us and we will be glad to help you.