Companies must adapt quickly to maintain their leading positions in today’s rapidly evolving markets. This is especially true in software development, where companies are under constant pressure to deliver innovative solutions to keep up with ever-evolving innovations and competition.  

The global IT talent shortage is a growing concern, impacting businesses of all sizes. The IT talent shortage is a substantial gap between the demand for skilled professionals and the supply of candidates. This problem concerns the need for more experts in many fields, from software developers to cybersecurity experts. At LaSoft, we delve into the issue and research the talent shortage in different countries and ways to overcome the problem. One trend that has gained popularity in recent years is the dedicated team model. 

The dedicated team model is an approach that involves the exclusive hiring of a group of professionals to work solely on a single project for an extended period of time. These experts do not work with multiple clients but are entirely committed to a specific client and their projects.

Key insights we offer:

• Expert tips on how we work with customers and engage teams;
• Steps to hiring your ideal dedicated project team;
• LaSoft’s business practice of managing dedicated development teams.

TERMS AND DEFINITIONS

Outsourcing is the business practice of hiring engineers outside a company to perform services or IT products that were previously performed in-house. Traditionally, when you outsource a part of the work, you use not only the staff of your vendors but also the IT ecosystem and system development processes. Outsourcing has three main cooperation models: Project-Based, Dedicated Team, and Team Extension Model.  

Outstaffing is a model of remote employment in which the vendor acts as an employer and is thus responsible for wages, office space, bonuses, taxes, equipment granted to a worker, retention, replacement, and relocation while you, as a client, provide engineers with tasks and assignments, and guarantee to keep them busy for an agreed period of time. 

Nearshoring is the practice of hiring staff to perform services or create IT products from nearby countries.

Both outsourcing and nearshoring have three possible cooperation models that are slightly different and have to be used differently depending on your situation, budget, and goals. 

Project-based is a model where you order full-cycle software development services from an independent vendor team. The vendor team uses its infrastructure and software development process to implement and deliver the solution on the agreed date. The scope and budget of the project are usually fixed in project-based cooperation, or both sides agree on a “not to exceed” agreement, where limitations are clear for both sides.

A Dedicated Team is a model in which you hire a dedicated development team consisting of more or less independent professionals who work on your project for an agreed-upon period of time. In this model, you have the flexibility to choose your toolset and processes or follow the toolset or processes of your vendor, which is more standard for the dedicated team. Unlike the project-based approach in the dedicated team model, you have more flexibility in scope changes, but the timeline is more flexible, and the budget is approved not for the project but for the year (annual budget) or for an agreed period of time. 

Team Extension is a cooperation model in which you hire only a particular professional from your vendor, usually to cover the missing expertise. The hired professionals will be working on your project alongside your in-house team. 

Why Choose the Dedicated Team Model?

In today’s competitive business environment, where there’s a tendency for a shortage of highly skilled talent, we witness global competition among companies for tech talent.  There are many reasons why more and more companies decide to outsource some of their projects or processes, choosing a dedicated team model. More and more businesses are eager to tap into a global talent pool, benefit from cost efficiency, and achieve scalability.

The global talent pool opens access to various professionals with diverse expertise and experience. It allows for the hiring of a dedicated team with the right skills and knowledge to deliver the project successfully. So, which factors influence the tendency to involve dedicated teams over in-house teams?

The talent shortage is definitely a reason why companies opt for a dedicated development team. The vast majority of recent studies show similar figures of talent gaps in different countries, and the numbers are concerning. One big challenge is finding a tech skill; another is retaining this talent.

Easy upscale and downscale the team. Unlike with the in-house team, your vendor usually has already trained developers to help you with the project; you can easily scale the team from 5 engineers to 10 if needed. And you can downsize the team from 10 engineers to 5 when there is no need for them anymore. No firing of in-house personnel, which may damage the team loyalty, and no additional expenses related to supporting dismissed employees.

IN

83

RO

82

AU

81

BR

81

ES

80

CZ

49

FR

79

DE

89

IE

79

GR

78

UK

78

CA

77

AT

76

BE

76

HU

75

IE

74

CH

74

US

74

JP

74

IT

73

AR

72

TR

71

FL

70

SK

56

PL

70

NL

66

Source: Manpowergroup

Cost efficiency is also a vital advantage of hiring a dedicated team from any nearshore destination. It allows you to find a cost-effective solution based on the rates of the country you choose.  By hiring a dedicated development team, companies can avoid the additional costs associated with in-house teams without compromising the quality of the project: recruitment costs, employee training costs, and maintenance costs. Software development projects use nearshore outsourcing services, guaranteeing access to high-quality labor and specialized knowledge at reasonable rates.

Tax efficiency: in many cases, nearshoring your development reduces a tax burden on your business, as employment tax does not apply in the case of outsourcing and nearshoring. 

AT

56599

BE

37200

BG

23729

HR

17056

CY

27000

CZ

35207

DK

70985

EE

38628

FI

48000

FR

43000

DE

62200

GR

16800

HU

24581

IE

56000

IT

30000

LV

30168

LT

37656

LU

62939

MT

35000

NL

61660

PL

33135

PT

20400

RO

19884

SK

27372

SI

26748

ES

32000

SE

44766

UA

30000

Another advantage of the dedicated team model is scalability. Companies can easily scale their dedicated team depending on project requirements, whether by expanding the team for a larger project or downsizing for a smaller project. This flexibility allows companies to adapt to changing market conditions and achieve their goals more effectively.

A dedicated team model stimulates innovation and focuses on core technologies. With a dedicated team handling specific tasks or projects, your in-house team can concentrate on maintaining your core technologies and settle for innovative ideas. This focus ensures that your business remains competitive and cutting-edge, leading to better solutions and outcomes.

Many businesses that tried to outsource tasks to dedicated teams understand the value of freeing up resources for more critical projects. Outsourcing certain tasks to a dedicated team redirects your internal resources toward core business functions and strategic initiatives. You can open up new options and directions for your business’s development.

Dedicated Team Model as Part of IT Outsourcing  Practice

The main factors driving IT outsourcing are the rapid advancement of innovative technologies and the shortage of skilled professionals. This issue spans various domains, from cloud computing and DevOps to chatbot development and AI.

1. As technologies develop and cyberattacks become more widespread, outsourcing companies must adopt a multi-level approach to mitigate risks and protect customer data. That’s when they find dedicated teams to provide cybersecurity and data protection.
2. Despite becoming more prevalent during government-imposed lockdowns several years ago, AI and automation require human support, highlighting the ongoing need for human intervention. Businesses search for experts to implement the new technology and stay competitive.
3. There is an increasing demand for cloud computing, and secure cloud-hosted systems as employees need to access their companies’ servers remotely, regardless of their location and companies need to scale their infrastructure due to market growth.
4. Outsourcing MVP development can be more cost-effective than using in-house resources, especially for startups and small businesses. It eliminates the need for extensive hiring and training, reducing overhead costs. Experienced, dedicated software teams can quickly build and launch an MVP, allowing companies to test their ideas in the market sooner.
5. The discovery stage involves understanding the project scope, requirements, and objectives. Outsourcing to professionals specializing in this stage is like getting a second opinion to validate your idea and delve into market demand and users’ needs. The workflow ensures a structured and efficient process of gathering valuable data and understanding market trends, which can inform the project’s direction and strategy.

The Growing Tendency: Revenue in the IT Outsourcing Market for 2024

Source: Statista

A Dedicated Development Team Structure

We already know the most popular collaboration models between clients and outsourcing partners are project-based, dedicated teams, and team extension. Let’s focus on the dedicated development team model.

A dedicated team is a team of professionals who work solely on your product for an agreed period of time. Unlike project-based development, where the project scope, price, and goals must be agreed upon before development activities begin, the Dedicated Team gives you much more flexibility.

While the dedicated project-based approach is very suitable for MVP development, the Dedicated Team or Team Extension model works best if you already have a product or a functioning business and plan to develop and improve it over several years. The LaSoft Dedicated Team only focuses on your project for as long as you need it. After a certain period, the team will learn all the details about the product, including your users’ profile, working style, tools, and techniques you use.

The dedicated team model is better suited to someone looking for continuous development over a longer period. You will hardly notice any difference in your in-house development. This model gives you proper management control over your team. You decide what kind of engineers you want to hire, when they should start, how long they should be employed, and what they should do. This model only works well if you have good experience in web development. If you are a novice in this field, it is better to opt for project-based development, where the project scope and budget are clearly defined. In this case, one of our project management experts can help you specify and estimate your project.

There is no one-size-fits-all model for outsourcing a dedicated development team because the model might change based on the needs of the business project. Still, let’s check team structure that is in demand in teams that use a dedicated collaboration model as outsourcing services in software development:

• Business Analyst;
• Software engineers,
• UI/UX (user interface/user experience) designers,
• Project managers / Scrum masters,
• Q/A (quality assurance) specialists.

These experts combine expertise and skills to deliver better solutions and outcomes to the end Users. Some inexperienced startups try to save costs by eliminating some of the roles in their teams. But we advise considering that not covering at least one function will most probably cause a failure or loss of money, and having everyone in their place makes the whole team productive, leading to commercial success.

How Dedicated Teams Work in LaSoft

LaSoft teams are cross-functional. The cross-functional team provides you with all the necessary expertise to work efficiently and complete the project successfully. To create a high-quality product, in most cases, you will need a UI/UX designer, project managers, developers, and a quality assurance specialist. Some roles, such as project manager, quality assurance specialist, or UI/UX designer, can be performed part-time.

Tested on real projects. Most of our engineers have been with LaSoft for some time. They have passed several interviews and completed a probationary period. Their skills have been tested on real commercial projects.

They know each other. Team members do not spend extra time finding their way around because they have known the other team members for some time and have already worked together. A team’s valuable time is spent on more important tasks (which make the overall process more efficient).

You are only an email away from any C-level person at LaSoft. You can easily escalate any of your issues and they will be resolved in a timely manner. You will never get that kind of synergy with a large outsourcing provider. We pride ourselves on being a medium-sized company that provides high-quality services.

How to Hire a Dedicated Team with LaSoft

1. Project Brief. During the short meeting, we will ask you product-related questions, the required technological expertise, the roles you need to fill in and the expected team involvement.
2. Potential Candidates Review. Our Engagement Manager will send you profiles of potential candidates who are the best fit for you. At this stage, these candidates have already completed 2 interviews, during which our experts assessed their communication and technical skills.
3. Project kick-off. Your outsourced team is ready to start on the agreed date. During the meeting, you get to know your team members one more time and share your ideas. You can plan the release and sprint scope. During the project kick-off, you are welcome to visit us or we can visit you. This will help us to promote a common understanding of the project and better communicate your vision of the development process to the dedicated team.

The Role of a Client in a Dedicated Team

We make the process as clear and comfortable as possible. There is a list of stages where you can make decisions. Our customer:

1. Can interview each of his current or potential teammates;
2. Set up his web development processes or be consulted by our experts on appropriate practices;
3. Use any tools of his choice or use the standard LaSoft tools set;
4. Have direct access to any team member during the project implementation;
5. Provide feedback about work and influence both appraisals and salary reviews of team members;
6. Can ask to replace any of his current team members.

The Role of LaSoft As a Service Provider

1. We offer comfortable office facilities
2. Organize Recruitment, hiring, and education process
3. Organize local accounting and legal aspects of the cooperation
4. Make sure the best engineering and project management practices are employed
5. Make a project audit if some issues arise. We also consult customers
6. Ensure that team members are motivated and productive. Resolve team conflicts
7. Conduct recurring technical reviews and job performance appraisals of team members.

Contact the dedicated engagement manager to learn more about LaSoft.

Final insights

Software development outsourcing is experiencing substantial growth due to the ongoing digital transformation, prompting businesses to increasingly depend on IT services outsourcing to gain a competitive advantage. 

The perception of IT support outsourcing has evolved significantly. It is no longer viewed as a mere cost-saving measure, but a strategic decision that fosters innovation, particularly through cloud service migrations. This strategic shift is a testament to the changing dynamics of the IT industry.

The demand for software development outsourcing services is growing, especially in application development and maintenance. The market is highly competitive, but the talent shortage tends to foster a growing demand for tech talent outsourcing.