Much like a rocket without fuel, a business cannot thrive without talent. But what if this vital fuel is scarce or too expensive? This is the stark reality many tech leaders face today — the shortage of tech talent and its soaring costs.

There are many reasons why you might opt to build a dedicated team – from access to world-class development talent and a favorable quality-to-cost ratio to flexibility in scaling up and down whenever you need it. 

The best testament to the success of dedicated development is that companies are actively investing in it. In fact, the revenue in the IT outsourcing market is projected to reach US $512.50 bn in 2024.

In this post, we delve into everything you should know about dedicated development teams – from how this model works, its cost considerations, strengths, and shortcomings to favorable locations. Most importantly, we’ll explore if this model is right for your business. Let’s dive in!

Dedicated software development: How it works

A dedicated development model suggests expanding your unit by adding dedicated software developers located in a region with lower development rates, such as Eastern Europe, Asia, and Latin America. Such a team is called “dedicated” because it’s solely dedicated to the client’s project, working full-time. The client usually has direct access to each dedicated software developer. The vendor of a dedicated engineering team takes care of recruitment, employee retention, office space, IT infrastructure, HR support, and employee perks. Below we dive deeper into the benefits of this model.

We at nCube ensure a dedicated software development approach lives up to its name. The virtual units we build are tightly interwoven into our client’s software projects. We always gather dedicated development teams from the ground up and tailor them to the client’s needs.

Feel free to check out the examples of dedicated development teams we built for our clients here.

Advantages of a dedicated development team

• It’s more affordable than in-house staffing. Accelerance reports that the hourly rates across software development roles increased by 23% in 2022. This highlights the financial benefits of dedicated development. Hiring a full-time software developer in the United States or Western Europe costs between $125,000-$200,000 per year, without recruitment, onboarding, administration, and employee benefits packages. With a dedicated development team, you can avoid added expenses that come with an in-house team, as they are taken care of by the vendor. Moreover, you can source tech talent in such cost-effective regions, such as Central & Eastern Europe or Latin America. 
• It resolves team scaling problems. The US Bureau of Labor Statistics reports that the demand for software engineers is expected to grow by a staggering 25% until 2032, which is 8 times faster than the average growth (3%). It only means one thing – competing for tech talent is going to be more and more difficult. Fortunately, there’s always an option to scale quickly with dedicated software developers whenever your project requires extra hands. A dedicated team model is best when you need to bring the project up to speed to meet the timeline requirements.
• You’ll get a jump on time-to-market. Speed is another benefit associated with a dedicated development team. In our experience, you can build one within 2-6 weeks, depending on the number of team members. 
• You’ll have access to developers with sought-after expertise. According to a recent report by Robert Half, 90% of tech managers say that finding top talent remains a challenge. This brings us to yet another reason to work with a dedicated team – the variety of specialists in the global talent pool. For example, in Eastern Europe, you can find a dedicated software developer with expertise in major verticals, such as healthcare, banking, fintech, and more. A dedicated team based in a skilled tech hub like this can bring the expertise you lack to the table. 
• Your office will be up and running around the clock. Running a remote team comes with its challenges, but this work model also provides a lot of coverage, given that two teams working 8 hours equals 16 hours a day dedicated to your project. This way, thanks to dedicated development, you can increase your development capacity ×2. 
• It frees resources to concentrate on your core business. A dedicated software team gives you much more time to focus on your core business and vital processes. It’s proven that by engaging dedicated teams, numerous companies have managed to bring technology solutions that had a transformative power on their business model. 

Disadvantages of a dedicated development team

• Time zone and communication barriers. The biggest challenges that come with a dedicated development team model is working across time zones. Collaborating with a tech unit located far away means your in-house and remote teams have little overlap for communication at the same time. To overcome this, you need to schedule your meetings around the common time windows. While such communication can be effective, it falls short of face-to-face interaction related to the in-house staff. Thus, a dedicated development team located in a nearshore zone, where time zone differences are negligible, can offer a solution to overcome this obstacle. 
• Management is more intricate. Running a dedicated development team is more complicated than running an in-house unit. You’ll need to account for time zone differences, culture differences, and work styles in your management approach. One thing you can feel sure about with dedicated development is that team members will be fully dedicated to your project, which is the essence of this model. Selecting the right vendor, and conducting regular meetings and surveys, just as you do with your in-house developers, will simplify your management. 
• It’s not the most flexible model. Although a dedicated development team offers more agility than in-house staffing, it’s still less flexible than Staff Augmentation (SA) in terms of adaptability. With SA, you can add team members to your project on an as-needed basis – as opposed to the rigid formation of a dedicated development team. Once a dedicated team is formed, integrating new skills can be problematic, as it may impact the entire project. 

Let’s recap this part. When choosing between an in-house and a dedicated team, many companies lean towards the latter, mainly due to the high costs of local developers. A huge stumbling stone with this model can be maintaining communication and team control in a remote setting. The key is in selecting the right tools and setting the right processes. However, it would be better for a manager of a dedicated development team to have relevant experience in managing remote teams. 

A dedicated development team vs an in-house team: Key differences

“Should I build a dedicated team or a traditional in-house team?” Many tech leaders inevitably come across this question when the need for team scaling arises. Let’s compare the concept of a dedicated development team vs. in-house development across various criteria. 

What is the structure of a dedicated team?

The roles within a dedicated development team resemble those within an in-house unit, although you may want to backfill some of them with in-house staff. Let’s explore key roles in dedicated development.

• Project Manager (PM) 

PM is an expert who drives the software development process and supports your dedicated development team throughout the project. They will ensure your project stays on track and report to you on its progress.

• Business analyst (BA)

The role of a BA is to align the software development process with your business goals. Oftentimes, BA serves as a bridge between stakeholders and a dedicated development team. The key task of a BA is to ensure your business needs are translated into tech specifications. 

• Software Architect

A software architect is the mastermind behind your project. They design the overall structure and guide your dedicated development team on how to build and integrate different components of a software product.

• UX/UI designers

User Interface (UI) and User Experience (UX) experts will craft the design and usability of your software product. Their job is to create a user-friendly, intuitive, and attractive design for users. 

• Software Engineers

A development team, consisting of front-end and back-end experts, is the backbone of every project. These roles are the most costly on your dedicated development team. 

• Quality Assurance (QA)

QA experts are on guard for your software quality. They thoroughly check if your software meets the standards of usability, security, and performance before it goes live. 

• DevOps 

DevOps engineers focus on automating and refining processes aiming to enhance the speed, efficiency, and quality at every stage of software development.

Dedicated software development: Cost

Now that we’ve analyzed the key roles, let’s dive into the cost aspect. Below, we compared the rates of various tech roles in North America with rates for the equivalent roles in nearshore/nearshore zones. We believe this information may be useful for you to make an informed decision when selecting the location to build your team. You can see that opting for LATAM or CEE for dedicated software development is more cost-effective than in-house staffing in North America.

How to build your own dedicated development team: Step-by-step guide 

When building a dedicated software team, you want to source dedicated software developers with the right skills to bring your project to success. There are two major parties involved in this process: Customer and Provider. The responsibilities are typically divided in the following way: 

Now that we’ve outlined the responsibilities of each party, the next question would be where to start? 

Step 1. Define your requirements

Before contacting the vendor, your team should decide on a tech stack and prioritize features so that a vendor can build a dedicated development team based on your needs. Giving information about your company will help find developers who would be a good fit in terms of company culture.

Step 2. Interview candidates

Typically, the hiring process includes several rounds of interviews. The candidates are initially verified by the vendor’s team, which involves technical and HR interviews. Then, the candidates who’ve made the cut are forwarded to the client for client interviews.

During the hiring process, you may want to take the provider for a spin. Take notice of their company culture, communication style, and ability to meet your requirements. That will allow making an informed decision. With nCube, there’s no need to pay upfront until you are ready to hire a dedicated software developer. We also are open to signing a non-disclosure agreement before we start our cooperation.

Step 3. Launch your team

If you have chosen the team members carefully, chances are high that your dedicated development team will be a success. At this point, a lot depends on your involvement in the project. Set up the processes and communicate with team members regularly. If you choose nCube, you’ll be working with developers from CEE or LATAM who have high technical proficiency, a problem-solving mindset, and strong communication skills.

Dedicated software development team: Where to build it?

Let’s take a look at the countries that are the most comfortable for launching your dedicated software development team. 

Eastern Europe

When it comes to the best countries to launch your dedicated development team, many Eastern European countries (Ukraine, Poland, Romania, etc) are globally recognized as hotspots for this activity. 

In Eastern Europe, developers have vast experience working on global software development projects and excel at diverse technologies. Particularly, Ukrainian and Polish developers are well-versed in JavaScript, Java, C#, Python, PHP, Swift, and C++ as well as in-demand fields, such as Data Science, IoT, Blockchain, and AI/ML. 

When you go for dedicated team development in this region, you can rely on a repository of nearly 1 million expert IT specialists. Dedicated team development in this region is also a lucrative option thanks to a convenient time zone, no-barrier communication, and minimal cultural discrepancies. So, when sourcing dedicated software developers from Eastern Europe, you can optimize your budget without any trade-offs. 

READ ALSO: Offshore Product Development: Eastern Europe, Latin America or Asia? 

LATAM

LATAM is currently a growing tech hub, where such countries as Mexico, Argentina, and Brazil stand out as the most popular destination for dedicated development. LATAM is also a preferred region for US-based companies seeking nearshore opportunities. 

Akin to Eastern Europe, LATAM offers affordable software development rates compared to North America. LATAM nations are close to the US when it comes to the time zone, so many businesses prefer to launch dedicated software development teams in this region. Besides that, providers in LATAM are laser-focused on North American projects, which allows them to have a deep understanding of their inner workings, requirements, standards, and goals.

We at nCube focus on both of these regions and will help you set up your own dedicated development team in the destination of your choice. 

READ ALSO: Why is LATAM Software Development Thriving? 

A dedicated development team: Is it the right approach for your business?

To summarize our post, we’ve gathered a few scenarios where adopting a dedicated development model may be a suitable choice for your business. 

• Your organization lacks software development expertise;
• You need to rapidly scaly up your development capacity because of an increasing workload;
•  You need a sustainable development team for projects with long development cycles;
• You want to accelerate time-to-market by building a skilled development team fast;
• You want to add skilled technologists without delegating team control and SDLC to the vendor;
• You lack specific skills for a particular stage of SDLC, for instance, Quality Assurance;
• You want to shift the focus of your core team toward strategic initiatives rather than stick to a day-to-day development routine. 

At the end of the day, there is no universal recipe for developing software. In some scenarios, it’s best to go with an in-house software development team. In others, a dedicated team can be a good solution, especially when you want to scale your internal team fast and prune the extra costs associated with an in-house team. Together with a dedicated development team from nCube, you can build long-term relations with the best tech talent in Eastern Europe and LATAM. Let’s connect.

As a viable way to save costs and access talent with various backgrounds, offshore software development has become increasingly popular in recent years. If you’re considering going with this approach, your options range from sourcing offshore developers via one of the freelancing platforms to cooperating with a virtual team partner. The latter is typically the most convenient way to handle offshore software development. 

The common question is: How much does it cost to hire offshore developers? Typically, offshoring development rates boil down to several factors, a geographic location being the most significant rate determinant.  

In this article, we take a look at software development rates in the most popular offshoring destinations, so you can make an informed decision when choosing the offshoring development destination.

Offshoring development rates: Central and Eastern Europe (CEE)

Chances are you’re not only aiming to reduce the cost of development but also want to source highly qualified software engineers. Then, Central and Eastern Europe (CEE) is the best way to go. 

CEE boasts over 1 million software engineers, which makes it an attractive offshoring development destination. With the growing number of IT professionals, the region’s countries have taken significant steps to foster the development of their IT markets. 

Generally, IT specialists based in CEE are deemed to offer a higher quality of work than their Asian counterparts, which can be attributed to the fact that offshore developers in this region have access to strong, Europe-quality academic education. 

When it comes to the number of offshore developers, Poland takes the lead with roughly 225,000 professionals involved in software development offshoring. Ukraine is ranked second with nearly 185,000 IT specialists. According to PayScale, both countries are well-positioned to offer competitive rates, with an average of $15 per hour. 

Offshoring development rates: Asia

Asia spans many countries and includes cost-effective and expensive offshore destinations, offering a variety of offshoring development rates. For example, in India, one of the largest and most cost-effective offshoring software development destinations, you can hire an offshore developer for under $20 per hour. The downside of such an offshoring destination is a significant time zone difference and increased managerial effort associated with managing a team that constitutes people with a different mentality and work ethics. 

China also plays strong in the offshore software development field, offering similar to CEE’s offshoring rates in the range of $25–$40 per hour. While the price-quality ratio is more than reasonable, a significant concern is IP protection. On the other hand, the Chinese government supports the IT industry by providing economic incentives and investing in technology parks where offshore developers can develop professionally.

 Other countries of the region, such as Japan, Vietnam, Indonesia, and Malaysia can be a good option, given the quality to cost ratio. Offshore developers in Japan can earn only $20 per hour on average, even though the country is rightfully considered to be the cradle of cutting-edge technologies. Senior engineers in the countries mentioned above usually charge $30–$40 per hour.  

Asia’s peculiarity is that it has an equal number of highly skilled vs. semi-skilled offshore developers. An offshore software vendor that has entered the global IT market is likely to charge as high as $30-$60 for a full-time offshore developer. As such, if you are not willing to roll the dice, it’s best to consider other regions, where moderate hourly rates for offshore software development and high-quality software solutions aren’t such a rare combination.

Offshoring development rates: Latin America

Latin America is well-positioned to be the preferred offshore software development region for US-based companies. The geographic proximity enables the teams to synchronize effortlessly, communicating in real-time. In addition, the continent offers cultural and social affinity, as well as high English proficiency. 

The ease of travel is a fundamental reason why North American companies decide to choose this region. The geographical proximity allows visiting the offshoring development squad regularly, which is more challenging with European and Asia-based teams.  

Although software development rates in most Latin American countries are higher than in Asia or Eastern Europe, offshoring development remains a viable way to develop software compared to sourcing local resources. 

The hotbeds of offshore software development include Brazil, Argentina, and Mexico, where the hourly offshoring development rates vary between $30–$50. Cheaper options include Chile, Panama, Costa Rica, and Peru, where a full-time offshore developer charges between $15–$25. 

Offshoring development rates: Africa 

Africa is a new entrant in the software offshoring market. Currently, the IT job market in Africa is far from being an offshoring development hot spot like Eastern Europe or Asia. 

According to Accelerance, South Africa, Egypt, Morocco, Tunisia, Kenya, and Nigeria are the most promising countries that spearhead the continent’s IT industry. Morocco, Egypt, and Kenya offer the average offshore development rate of $20. 

Offshore software development rates are higher in Nigeria, and South Africa since the job market in those countries is less saturated, making it hard to find highly qualified offshore developers at moderate prices. Tunisia and Morocco are the preferred destinations for French-speaking countries, whereas the rest of the continent is a vast Arabic and English-speaking talent pool.

Final thoughts: software development offshoring with nCube

Offshore development rates depend on where you are hiring a team, and thus can vary drastically. Typically, they stay in the range of $15-50 per hour.  

What should you consider when hiring an offshore developer? The rates are affected by an offshore developer’s experience, seniority, and background. Needless to say that the more experience an offshore developer has, the more they will charge. 

The countries of Latin America top the list of countries with the highest rates for software development offshoring. On the other hand, Eastern Europe offers a vast pool of qualified talent at moderate prices. In contrast, the Asian and African IT job market is filled with low-rate job seekers, so choosing this region may save you money but will not guarantee a high-quality end product. 

We at nCube have been building development teams of Ukrainian developers for over a decade. We work for Western companies that chose Ukrainian developers for their strong tech background, problem-solving mindset, and high English proficiency. Contact us for more details on our offshoring development model.