According to Statista, enterprise software total expenditure will rise to 675 billion U.S. dollars in 2022, 11% more than in 2021. While some companies choose to offshore their software projects to external providers, others are looking for alternatives to extend their in-house software development teams. In this article, we will consider different ways how your business can leverage the potential of team extension, strengthening your competitive edge and gaining sustainable development in the long haul.
An extended development team model and its benefits
There are several ways companies can extend their software development teams. One way is to use staff augmentation, which involves supplementing a company's existing team with additional resources as needed. This can be done by adding freelance developers or by partnering with a development agency.
Another way to extend a software development team is through managed services. Under this type of arrangement, a company outsources the management of its software development projects to a third-party provider. It is a cost-effective way to get access to additional resources and expertise while maintaining a high level of control of all processes.
You can strengthen the skills of your current development team by hiring new experts and bringing their knowledge to the table. This approach falls under the extended development team model, a staffing arrangement where a company works with a team of independent software developers to complete a project or tasks. With an extended developers model, you gain total control over the project’s tasks and goals. That way, your cooperation with additional experts serves as a space where your business objectives and innovative technologies can converge. Yet, whichever option your business chooses, it is important to ensure that the software development team has the necessary resources and support all along the journey.
Team extension methods: Outsourcing vs. Outstaffing
Although these two concepts share some similarities, outsourcing and outstaffing are not interchangeable. When a company outsources, they are essentially hiring another company to do a specific job or project. Outsourcing can serve a wide range of purposes, starting from creating custom software to handling customer service. However, a software development company does not take responsibility for the employees of the vendor they use as an outsourcing partner. The key benefits of outsourcing are:
- Cost optimization. Companies can cut down on expenses by using independent contractors instead of full-time employees.
- Flexibility. The extended software development team model provides companies with the agility to scale up or scale down their workforce. This adaptiveness can be helpful if your business experiences seasonality or unexpected spikes in demand.
- Access to skilled specialists. When a company outsources a function or task, it can gain access to expertise that it would not have otherwise.
- Increased productivity. Using the extended software development team model often leads to enhanced operational efficiency, as independent contractors are typically highly motivated to complete tasks quickly and efficiently.
As an alternative strategy, outstaffing describes a scenario when a company brings in external specialists that become a part of the company. In this team extension model, the provider of the extended software development team is responsible for the payroll, employee benefits, and HR support of the employees. The benefits of outstaffing compared to outsourcing are that outstaffing is more flexible and allows for more control over the work environment, team roles, and quality of the outcome as it assumes managing the extended developer team directly.
A local extended development team
In-house hiring is the process of aligning the project’s objectives with talent outside of the company. This team extension strategy heavily relies on new hires. In-house hiring has many benefits, including increased employee loyalty, decreased turnover, and improved employee engagement. Yet, in-house hiring can hardly be considered cost-efficient, considering the expenses for team administration, retention, employee bonuses, etc. In addition, in-house employment can require a lengthy hiring process, making it difficult for a business to move forward swiftly.
Cooperation with freelance developers
Yet another way to extend a software development team is to add freelancers. Building cooperation with freelance specialists is a convenient way to expand your team and maintain complete control over the project. There are many advantages to working with freelance software developers, including the ability to hire them for specific projects, their flexibility in terms of hours and working arrangements, and the competitive rates they charge. Additionally, freelancers often have a wealth of experience and can bring a fresh perspective to your project.
Yet, adding freelance specialists is an intricate endeavor that requires a well-thought-out approach to some challenges. For instance, given an increasing number of tech specialists, it can be tough to find the right one for your project. That's why meticulously approaching the hiring process and accurately estimating whether the expertise and experience of a professional meet your business needs are crucial steps towards progress. At the same time, transparent communication is key to effective cooperation with freelancers. Setting up a clear team management structure and clearly expressing expectations are cornerstones of fruitful collaboration in a long-term perspective.
There are a number of ways businesses can extend their software development teams, including outsourcing, in-house hiring, or collaboration with freelance developers. By outsourcing or working with freelance technology specialists, companies can tap into a larger pool of software developers to help them meet their needs. Doing so can keep their costs down and get their products to market faster. In addition, your company will be better equipped to compete in the ever-changing marketplace by taking the time to build a strong software development team.
At nCube, we maintain a unique approach to extending your software development team. Our model is based on a personalized team formation process where we add software developers to your team according to your requirements and help you set up proper collaboration processes with added engineers. Our clients participate in all aspects of team extension – from interviewing and making decisions to hire to managing the team directly. In our model, you can extend your software development team with talent from Eastern Europe and Latin America. Contact us and let’s see if our approach can benefit your business.