Outsourcing and dedicated team: comparing development models

make a solution Outsourcing and dedicated team: comparing development models

In our constantly changing world writing a detailed specification (which takes at least 2-3 months) and developing a product isn’t enough any more for creating a truly high-quality and competitive product. Now the time requires close contact among the team of developers, marketing specialists, business analysts, as well as constant work with feedback from users. Classical outsourcing models can be not very effective in these conditions.

In this article we’ll try to analyse and compare two popular models of software development, outsourcing and dedicated team. We’ll try not only to consider advantages and disadvantages of each model, but also define which of them will be better for different types of projects.

First of all, for better understanding of this topic, let’s give them definitions.

Dedicated team
is a model when work on the project is organised according to tasks indicated by the client who controls the working process, and the team works on only one project. In fact, the client can hire and fire team members and regulate their load. Company takes the responsibility for office, communication and workflow organisation.

Outsourcing is a model when a company hires necessary developers “from outside”, but, unlike dedicated team, developers can simultaneously work on several projects.
Now let’s look deeper into each model.

Dedicated team
When choosing the dedicated team model, you receive the possibility to completely control its work. Dedicated team immerses in your business, better understands its processes, objectives, mission, and also practically always focuses on project results more than specialists working within the outsourcing model. At the same time, employee productivity improves, team cohesion occurs. Also one of the main advantages of dedicated team model is communication process transparency: you can completely control your specialists, set up the schedule that is convenient for you, distribute tasks among them. Constant feedback allows to take into consideration all client requirements and comments and introduce necessary and timely changes.

All advantages of dedicated agile team are revealed the best way in complicated and long-term projects.

Within the outsourcing model, the working process is organised according to rules set up by the outsourcing company, meaning that specialists working on your product can be involved in some other projects at the same time. As a result, their work is often planned for several weeks ahead, and introduction of changes to the list of tasks as a result of additional loads from other employers, unforeseen difficulties, or delays, often leads to significant time and financial costs. The advantage of this model is the cost: in outsourcing it is generally lower than in a dedicated team, but you should remember that any changes in the project can lead to changes in your budget, and it introduces some risk.

As a rule, outsourcing model has two possibilities of payment: time&material (generally pay per hour) or a fixed payment for the scope of work. In case of the latter, the team performs the set of tasks agreed upon, and any change is discussed and approved separately, which sometimes takes a lot of time.
Let’s classify all of the aforesaid.

Advantages of dedicated team model:

– involvement of developers in the project – 100%;
– the possibility of the client to fully control team work;
– developers better understand objectives and tasks of the company, and the company itself;
– team cohesion;
– constant feedback;
– higher quality and more complex tasks performance;
– fixed monthly payment (depending on the team size).

Disadvantages of dedicated team:

– higher prices;
– the obligation to pay developers even if specialists complete tasks before an indicated deadline or if there are no tasks for them at some moment;

Now, let’s move to outsourcing advantages and disadvantages.

Advantages of outsourcing:

– usually lower prices than in dedicated team model, but employer must provide developers with quality technical specification;
– technical risks are on the side of developers.

Disadvantages of outsourcing:

– difficulties in deadline indication and team members selection;
– tasks are performed strictly according to the list;
– all new requirements, defects and delays result in budget changes and extension deadlines.
As we can see, each model has its pros and cons. Everything depends on what exactly you need. If a project is complicated and requires significant efforts and necessity to meet a short deadline, outsourcing model won’t be a good decision.
However, in relatively small projects, which won’t take a lot of time, it can become the best choice. In this case you will hardly feel its disadvantages, and it generally has lower prices than dedicated team (but remember its risks! sometimes, due to budget changes as a result of different obstacles, prices can become even higher than in dedicated team model). If you need to receive a working solution with a small budget, you should also choose outsourcing model.
If your project is complicated and large-scale, requires significant efforts and costs, the best variant for you is hiring a dedicated team. In case you need/want to meet the short deadline and get a high-quality product, this model also will be the best choice for you.


Outsourcing and dedicated team: comparing development models
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