You might already have an opinion on the subject in question. You’ve examined a bunch of articles, surfed the internet, consulted your friends or colleagues who’ve already tried that dedicated team thing.
You’ve probably found that some companies are perfectly happy with their dedicated development teams — they even go as far as to claim that it has been one of the best decisions in their lives. Others say there are plenty of pitfalls to expect when you decide to hire a dedicated development team.
If you’re considering hiring a dedicated development team yourself, you’ll need to do some homework first. That's why we’ve put together this checklist to help you get started.
Checkpoint 1. What Is the Dedicated Development Team model?
Dedicated Development Team is a model of cooperation between a client and a service provider (a vendor), where the latter allocates a team of IT professionals to the client for software development purposes.
A dedicated development team is hired by the vendor and is physically located at the vendor’s office. The vendor takes care of all the administrative and legal issues including recruitment, payroll, taxes, sick days, and benefits for the developers.
The hallmark of the dedicated team model lies in its name — your future remote team will have exceptional focus and exclusive dedication to your project every second of their working time.
Dedicated Team in Outsourcing vs. Outstaffing
The Dedicated Development Team model is widely used in IT outsourcing and IT outstaffing companies in different variations.
Within the Dedicated Development Team model in IT outsourcing, a vendor provides you with all the staff required to complete your project, and they work for you full-time/as many hours as your project requires. The client is not involved in the interviewing process and daily communication with the dedicated team.
The Dedicated Development Team model in IT outstaffing (which is the cooperation model we offer at Daxx), is also often referred to as an extended or augmented team (or staff augmentation). In this case, a dedicated development team works with a laser focus on one client’s project or product. The client is involved in the interviewing process and daily communication with the dedicated team.
In this article, we’ll be discussing the second type, the Dedicated Development Team model in IT outstaffing.
Checkpoint 2. Why Hire a Dedicated Development Team?
Most companies tend to hire dedicated development teams when their own in-house team lacks skills or expertise in specific areas.
The other most common reason is cost efficiency due to manageable offshore software development average rates. However, while making a cost-based analysis of hiring remote vs. in-house developers, clients usually come across other reasons to look closer at dedicated teams.
Having your own dedicated development team can be a great option because of the following advantages:
- Hand-picked tech talent
The client personally interviews each candidate and picks those who would fit the existing in-house team best.
- Full control over project delivery
The client has a hands-on role. They interact with the team on a daily basis, monitor the overall progress and are responsible for the successful completion of the project.
- Laser focus
Since your own dedicated development team members are completely immersed into your project, they have a deep understanding of its goals.
The dedicated team is at the client’s disposal, so they can be flexible and easily adapt to frequent changes of project requirements (typical situation for large and/or long-term projects).
The client and the dedicated team work closely together. The continuous everyday communication via Asana, Jira, Skype, etc. promotes better involvement, increased collaboration, and productivity. According to Harvard Business Review, an average dedicated development team boosts productivity by 10%.
- Transparent Pricing System
The monthly payment is composed of the dedicated software development team members’ fixed salaries plus an outstaffing vendor’s fee, which is also fixed. The fee includes payroll, taxes, office infrastructure, workstations, and support staff for your dedicated offshore team. The type of contract used for hiring a dedicated team is called a Cost+ contract.
Hiring a dedicated development team is a cost-effective solution to implement your project in a desirable way and have access to top remote developers.
Checkpoint 3. Outlining the Dedicated Team Structure
The structure of a dedicated development team depends on the client’s needs.
The client can extend their in-house team with several dedicated developers only, or hire an entire cross-functional development team of software developers, project managers, QAs, designers, and other team members that together provide a full-cycle service.
Cross-functional dedicated teams are a common request at Daxx. Check out our case studies to learn more:
Checkpoint 4. What Aspects to Consider While Hiring an Offshore Dedicated Development Team?
Here are the main aspects to consider before hiring a dedicated offshore team:
The most common ways to hire remote teams is by offshoring or nearshoring.
Offshore software development is delegating engineering functions to companies located in a foreign country far away from yours. They can be on a different continent, with significant time zone and cultural differences.
Nearshore software development is delegating engineering functions to companies located in a closer time zone and geographical proximity to your country. For example, Western European countries can choose between Poland, Ukraine, Belarus, etc. as nearshore development locations.
Over the years, there have been regions that proved to be the most popular destinations to hire a remote development team. These are Eastern Europe, South America, Africa, and Asia.
To know which country to choose, you should consider the availability of the needed tech talent, the time zone difference, languages, cultural fit, and a number of other aspects we discussed in our complete guide to hiring a remote development team.
- Average offshore developer salary
Offshore developer salaries are substantially lower if compared to an average software developer salary in the US ($106,816) or in Europe, e.g. Switzerland ($88,773).
For example, the average developer salary in Ukraine, one of the most popular offshore destinations in Eastern Europe, is $30,000 a year for a middle developer.
Hiring a dedicated offshore team you will be proud of depends on a carefully chosen vendor. There are two most common ways to find one — through a personal reference or a good old internet search.
Once you’ve made a list of vendors, you need to apply an objective set of criteria to narrow down your choices:
- Talk to people from your industry
- Ask to see samples of the vendor’s previous work
- Ask for references from the existing clients
- Read feedback about the vendor company on Clutch
- Examine the vendor’s LinkedIn account (number of team members, number of years on the market, office locations)
- Review their certificates
And, what’s most important, make your decision based not on what the vendor says, but on the deliverables they’ve produced.
- Security Risks
Security breach is the most common risk when it comes to working with a third-party contractor.
In IT outsourcing, the most common and serious risks are those that affect operations and transactions, the confidentiality of information, and business continuity.
However, the most important security risk associated with outsourcing is information security.
When relying on a third party to provide services for your company or on your behalf, you inevitably share copyrights, patents, trade secrets, not to mention access to sensitive information that can be gathered, stored, and distributed.
Consider the following strategies to mitigate the risks and protect your business and intellectual property:
- Make sure your vendor has taken care of their GDPR policy, as this policy regulation applies not only to you, the data owner, but a third party also.
- Examine the contract carefully and make sure the terms and punishment for intellectual property infringement or abuse are clearly outlined. If needed, don’t be stingy and involve a lawyer to translate the language of the contract into human speech.
- Make sure that the vendor uses preventive measures against data breaches by using proper network security, mobile device management, endpoint and physical security systems. For more information, refer to our article “Top 5 Cybersecurity Threats and Popular Data Breach Protection Systems.”
Why Eastern Europe?
Eastern Europe is a popular outsourcing hotspot for American and Western European businesses. Also known as a tech talent goldmine, Eastern Europe houses over 1.3 million software developers.
Ukraine, Poland, Belarus, and Romania are the most promising countries in the Eastern European region displaying steady growth in the technical realm.The IT service and software R&D market in these countries is growing by 20–25% annually, which is 4–5 times faster than the global average (5%).
Hiring a Dedicated Team in Poland vs. Ukraine
Poland and Ukraine are two leading destinations for hiring a dedicated team in Eastern Europe, providing world-class tech talent with a sensible cost-quality ratio. These countries share similar history and culture, as well as technical landscapes.
If you’re choosing between hiring a dedicated development team in Ukraine or Poland, you need to be aware of the key aspect that distinguishes these two countries.
Having a lot in common, Poland and Ukraine have different tech ecosystems. Poland’s tech industry has been captured by giant world corporations and divided between service and product companies.
Meanwhile, Ukraine’s tech industry is centered around providing software development services through small and middle-sized companies resulting in vast technical expertise. Having less competition from the world’s tech giants, the majority of bright Ukrainian minds work in IT outsourcing.
Hire a dedicated development team in Ukraine
Ukraine is one of the most popular outsourcing destinations in Eastern Europe due to low development costs which, however, don’t affect the quality of service.
- IT Services Market
The Ukrainian IT market shows rapid growth, having reached $4.5 billion of the IT industry export in 2018. Western European countries remain the largest export outsourcing markets for Ukraine.
Ukraine ranks 33rd in the world in the Tholons Services Globalization Index, having climbed up 9 positions in only one year from 2018 to 2019. The Index evaluates the digital transformation of industries and services globally.
- Tech Talent Pool
The number of tech specialists in Ukraine has reached almost 200,000. And this number is increasing by 36,000+ tech graduates annually thanks to a solid backup from educational institutions providing high-level tech education.
- Ease of Doing Business
The Ukrainian government and local authorities heavily support the Ukrainian IT industry. Ukraine has significantly improved its position in the Doing Business 2020 ranking, landing on the 64th spot out of 190 countries in total.
With its reduced labor taxes and social contributions, the taxation policy in Ukraine has become more favorable for the development of the IT industry.
- IT Services Market
The value of the IT industry in Poland has increased substantially in the last 20 years – from $1.2 billion in 1995 to $4.62 billion in 2018.
- Tech Talent Pool
Poland has the most extensive tech talent pool in Eastern Europe that has reached 295,300 developers as of 2020. 32% are working in IT outsourcing.
- Ease of Doing Business
Poland is an EU country with a stable business environment and a strong economy that makes it an attractive outsourcing destination. Poland ranks 44th in the Doing Business 2020 ranking.
Checkpoint 6. How to Manage Your Own Dedicated Development Team?
At last, you can breathe easy: you’ve finally defined the location, chosen the outsourcing vendor, and picked the best remote tech talents. What’s next? Here comes one last stage — you need to set up the right work operations within a newly created team of in-house and dedicated developers.
Sometimes companies think they’re simply not ready for remote work processes or are just reluctant to change their habits, for example start speaking another language during team calls.
To get started with a dedicated offshore team, we recommend the following:
- arrange daily sync-up calls
- provide tools for effective collaboration and task tracking
- foster knowledge sharing and initiative
And remember to treat your dedicated team the same way you treat your in-house team. As in any human business, it’s all about people. It’s not about ‘us’ (you and your in-house team) and ‘them’ (your future dedicated remote team members), but about ‘us’ as one team. Great dedicated development teams are not born overnight. They need time and freedom to experiment and find their way. And, what’s even more important, they need wise management to gain momentum.
Why Hire a Dedicated Development Team in Ukraine with Daxx?
- Daxx is a Netherlands-based company that has been helping businesses from all over the world build remote software teams in Ukraine for 20+ years.
- We've already helped 300+ clients from the Netherlands, the UK, the US, Belgium, Norway, Germany, Australia, and Israel extend their teams with remote developers in Ukraine.
- Our transparent IT outstaffing cooperation model helps clients scale their development teams quickly and efficiently. You’re the one to choose and hire developers, as well as to manage them with the tools and methods you like.
- If you'd like to learn more about Daxx’s services, don't hesitate to contact us, and our experts will get back to you shortly.