The demand for qualified software developers is growing faster than ever. Companies in the USA and Europe often fail to find suitable candidates to fulfill their software development needs. For instance, in every region of the USA, there are more openings for software engineers than the number of qualified developers to fill them.
Indeed, it is hard to find the experts with the necessary skills, experience, background, and reasonable salary expectations. That is why more and more companies opt for staff augmentation and hire offshore dedicated developers.
Organizations that decide to outsource software engineering usually consider different engagement models when choosing a vendor. The most common ones are Fixed Price, Time and Material, and Staff Augmentation, which is often called the Dedicated Development Team. We explore these cooperation models in more detail in one of our blogs. Whereas in this article, we focus on the Dedicated team model and its benefits.
How the dedicated development team model works
Dedicated Development Team (DDT) is an engagement model in which an outsourcing vendor builds and hosts a team of full-time IT-professionals who work exclusively for the customer’s projects. This model is best for long-term cooperation on the projects with changing or not clearly defined requirements.
Recruiting offshore dedicated developers enables you to engage the best tech skills in the industry. These software engineers devote their efforts only to one customer. Therefore, they work exclusively for your project accumulating the knowledge and experience in your domain. Ideally, they integrate with your in-house team and become a part of your organization. So you can build your development team according to your specific requirements and scale it up or down in the future depending on your business needs.
Many well-known brands such as Microsoft, CNN, The Economist, Verizon, Novell, OpenText, and others have worked with offshore dedicated development teams.
For instance, Lebara (a global telecom provider) has cooperated with N-iX, the Ukrainian software development provider, for over five years. The company started with a team of 10 dedicated developers and extended it to 113 IT specialists. As a result, Lebara built a large development center with multiple teams working on different projects in Eastern Europe. Its dedicated developers cover a broad range of expertise including software development, mobile application development, quality assurance, business intelligence, DevOps, and more.
In case you are new to this engagement model, here’s a step-by-step description of how it works from the moment you choose an IT outsourcing partner:
Apparently, there are various modifications of this model depending on the vendor and the customer’s needs. Some outsourcing companies offer more support to the clients such as consulting, overseeing delivery, taking care of employees motivation and professional development, etc. Others only provide recruitment, infrastructure, and administrative services. So when you hire a dedicated development team, you need to establish the cooperation that would fit your needs.
Benefits of staff augmentation
Access to engineering talent across the globe
A lot of companies are facing the challenge of finding the necessary tech talent. For instance, the EU countries are estimated to suffer a shortage of 500,000 software engineers by 2020. Meanwhile, Germany, Switzerland, the Nordic and Benelux countries are considered to have the biggest gaps between tech resources demand and supply.
When you look for the dedicated developers offshore, you get access to the wide-ranging pool of talent. For instance, there are over 1 million engineers in Central and Eastern Europe, and many of them work for outsourced projects. For companies that need to grow their development capabilities fast, this is a considerable benefit.
Control over product development
Unlike the Fixed Price model, staff augmentation enables the customer to keep maximum control over product development. It provides the flexibility in changing the project scope and thus allows a company to swiftly react to the new market trends.
In addition, the client keeps control over the dedicated development team, tracks the working process, assigns tasks, and monitors progress. However, you may also delegate this function to the outsourcing vendor. Ultimately, dedicated developers are integrated with the on-site and distributed teams, so they all become a single unit sharing the same coding practices and the company culture.
One of the greatest benefits of staff augmentation is the ability to grow the engineering capabilities faster than with any other strategy. This is especially critical for fast-growing startups that need to bring new products to market. A lot of IT outsourcing providers try to keep their best talent in the company, so when a client needs to scale the team fast, they can use both their available internal resources and recruitment capabilities.
For large ISVs and enterprises, this is also a great advantage, especially, when they need to set up several teams at once. For instance, our partner Travelport Locomote (part of Travelport, an industry-leading corporate travel platform), needed to augment their resources with several Scrum teams within a limited timeframe. So the ability to find the necessary people fast was among the most important criteria when choosing an outsourcing company.
Capabilities to innovate
Staff augmentation also allows companies to tap into new technological expertise. Introducing innovations such as Virtual Reality, AI, Machine Learning, Big Data, and Blockchain is costly and time-consuming. Therefore, developing such expertise in-house is not always feasible. Whereas a lot of software outsourcing vendors work on many projects across various industries and have the pool of specialists in many different technologies. So businesses often use this as a foundation for modernizing their platforms and adopting emerging technologies.
Other benefits of staff augmentation include a predictable budget, increased scalability, no administrative headache, and more.
Things to consider when hiring dedicated developers
Choosing an outsourcing vendor for providing team augmentation services is not an easy task. The vendor landscape is vast and diversified, so it is important to establish clear criteria for selecting a partner that would meet your business needs. Here are a few aspects to consider:
The location of the vendor’s delivery center is a significant factor when it comes to outsourcing software development. In order to find the most suitable outsourcing destination, you should take into account such aspects as cultural compatibility, time difference, size of the talent pool, and even the level of English proficiency in the country.
India has been an IT outsourcing leader for many years due to its ample engineering resources. However, more and more often, Western businesses cooperate with Eastern European vendors. This region has the highly qualified workforce, solid STEM education, and a rich talent pool. Also, it is culturally close to Western Europe and the USA, which ensures more effective communication. View our detailed report on the IT outsourcing destinations of the CEE region.
After you decide on the country where you would like to hire your dedicated development team, it is time to choose a vendor. You can start by checking the reputation of the shortlisted companies. The best way to do it is to go through client reviews on Google, Facebook, Clutch, Good Firms, and similar platforms. Also, you should ask a company to provide references when you contact them.
Secondly, take into account industry awards and rankings, including Top 100 Global Outsourcing Companies by IAOP, Software 500, GSA Awards, European IT & Software Excellence Award, etc.
Capacity to scale a team
One of the primary reasons for extending a team with offshore developers is an acute need to grow development capacities. Even in the countries with vast talent pools, recruitment may take months, especially if you need scarce specialists in such technologies as Scala, Golang, Hadoop, etc.
If you are planning to set up a big dedicated team or a development center with multiple teams working on different projects, you should consider the size of the potential vendor and its recruitment capabilities. Mid-size and large outsourcing providers are likely to have some of the resources you need internally. Also, it is easier for them to attract new talent and train them if needed.
Employer brand image
The vendor’s ability to scale your team fast will also depend on its employer brand image. So you need to make sure that the company has a good reputation in the local IT market, and people are willing to work there. Again, you can look through Facebooks and Google reviews to check the employees’ feedback.
For instance, if you are considering a software outsourcing company based in Ukraine, you could check out DOU, the largest online development community in the country. It regularly surveys the employees of the Ukrainian IT companies to make an unbiased list of the best employers in the Ukrainian IT market.
Moreover, it is easier to control the retention rate within your dedicated team if the vendor cares about its employees. A reliable outsourcing partner will work alongside you to motivate your developers, build loyalty on the team, and create an inspiring work environment.
Established delivery model
Hiring dedicated developers is not enough. Both the client and the vendor have to do a lot of work before they can build a strong team for lasting cooperation. Therefore, we suggest choosing a company that has a solid track record in building dedicated teams that deliver real working software products. Also, you are more likely to achieve success with the team that is experienced in completing projects like yours.
So study the vendor’s portfolio, learn about the number of dedicated development team engagements, and pay special attention to long-lasting partnerships. This will help you to determine whether a vendor is a reliable business partner.
The productivity of your dedicated development team will also depend on the working environment. So make sure your potential partner has all administrative facilities, equipment, and other infrastructure required for business.
Another aspect is the IT infrastructure. Your outsourcing provider should have a fully-fledged IT department that is able to run the working processes efficiently. In addition, the company should have the hardware, software, network resources and services required for delivering IT solutions and services.
High security standards
When it comes to intellectual property, security issues cannot be underestimated. It is crucial that the vendor complies with international security standards such as ISO, PCI, HIPAA, and dedicates much attention to educating its employees and establishing an effective security policy. For instance, you may check out the vendor’s audit reports that include details regarding its security, availability, processing integrity, confidentiality, and privacy.
Your outsourcing partner should have secure office facilities, protected IT infrastructure and people responsible for mitigating any security risks. Thus they should share your standards in data protection and risk management.
Staff augmentation can solve a lot of challenges for your business such as the need to scale up, grow your development capabilities, and adopt innovations faster. Still, in order to benefit from staff augmentation and hire skilled dedicated developers, you have to consider a number of different factors.
It is important to define the most suitable geolocation for your outsourced team, go through the vendor’s portfolio, and learn about its reputation. What is more, the outsourcing provider should have enough capacities to satisfy your growth needs and attract even the most scarce talent.