Dedicated IT Team Engagement Models: A Guide for CTOs

In the pre-COVID era, on-site team engagement was the most popular working model for many businesses. However, during the pandemic, remote work emerged as a viable solution for businesses to cope with the social distancing guidelines that were in place at the time.

The IT world is a dynamic ecosystem constantly evolving to accommodate businesses’ dynamic needs. This evolution is evident in the rise of multiple team engagement models designed to improve process efficiency and give companies the agility they need to succeed.

In the IT industry, an engagement model is a framework that governs how a vendor provides Software Development Services. This article discusses the different types of IT team engagement models, including the dedicated team engagement model, their pros and cons, and how to pick the right one for your business.

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Table of Contents

What is IT Staff Augmentation?

What is an IT engagement model?

Types of IT team engagement models
      Extended IT Team Model

      Dedicated IT Team Model

     Fixed Price Model

     Time and Material model

How a dedicated team model works

Managing a dedicated software development team for success

Finding and hiring a dedicated team

Overcoming challenges and limitations of IT team engagement models

How to determine the best IT engagement model for your Software Development needs

Conclusion

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What is IT Staff Augmentation? 

Staff Augmentation is a hiring strategy that involves outsourcing work to resources sourced, vetted, hired, and onboarded by a nearshore talent recruitment company. This allows clients to hire top-tier talent without the hassle of traditional hiring.

While most IT companies use staff augmentation to fill temporary roles, complete short-term projects, and extend existing teams, this strategy can also be used for long-term commitments to support internal teams.  

It's worth remembering that remote work is not an entirely new trend, but it gained more prominence during and after the COVID-19 pandemic. Many organizations today use offshore or nearshore staffing services to build their software development teams. These two software development outsourcing strategies have several benefits, including:

• Streamlining your talent sourcing and recruitment processes.
• Providing access to a larger talent pool.
• Reducing development costs.

In recent years, nearshore staff augmentation has become popular among US companies because it allows CTOs, Technical Recruiters, and Hiring Managers to find resources within the same time zone and geographical location.  The preference is down to the fact that it solves the collaboration, communication, language, and cultural barriers associated with offshore outsourcing. 

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What is an IT Engagement Model?

An IT engagement model refers to a set of guidelines that determine how a company collaborates with a technology partner or service provider.

IT engagement models define the terms of engagement in relation to work delivery, payment schedules, and how the hired resource fits into the existing team structure. As such, there are various kinds of team engagement models in the software industry, each suited for different types of workloads and client budgets.

One such model is the dedicated team model, a structured outsourcing approach where a company hires a team of skilled professionals who work exclusively on their project. Dedicated development team services enhance flexibility in team management, cost-effectiveness, and productivity. This model establishes the high level of commitment, integration, and expertise that a dedicated team brings while allowing clients to maintain control and benefit from a seamless extension of their in-house capabilities.

More details on the detailed analysis of the top 4 most used team engagement models in the software development industry are below.

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Types of IT Team Engagement Models

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1. Extended IT Team Model

Under the extended team engagement model (ETM), the nearshore resources work as part of your existing in-house team. This model is useful when you already have an in-house core development team ready to take up a project but is lacking talent with a particular set of skills, such as experience with a specific Development language or Cloud platform.  

Pros: 

• Access to a larger talent pool.
• Saves time and costs incurred during the hiring process by leveraging nearshore Software Engineers.
• Team management remains entirely in the hands of the outsourcing company.

Cons:

• Transferring knowledge to a remote team can be a lengthy process.
• Remote Developers may take time to adjust to the organization's structure and working practices.

When to use:

• When specific experts are required urgently for an ongoing project.
• There is no intention to make any changes to the in-house team structure.

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2. Dedicated IT Team Model

A dedicated IT team engagement model is similar to the extended model, with the only difference being that the entire team is made up of outsourced talent provided by a technology partner. This model is mostly used for long-term projects requiring experts from various domains such as Development, Architecture Design, and Database Design, to name a few.

Pros:

• Lower Development costs due to working with remote nearshore teams.
• Management is easier since the model involves dedicated managers, and the reporting structure remains the same across the entire team.
• You have direct control over team priorities and working methods.

Cons:

• Since this model is employed for high-profile, long-term projects, it requires thorough research, seamless communication, and strict accountability. All of these are challenging to maintain simultaneously.
• Clients have to share confidential data with the dedicated team, which may require additional data safety measures such as Non-Disclosure Agreements (NDAs).

When to use:

• When starting a long-term project from scratch and you do not have the required expertise in-house.
• You need to expedite the development phase for a faster time to market for your product.
• You wish to delegate the responsibility of managing a team.

Dedicated Development Team: Composition and Structure

In terms of composition, a dedicated development team is a cohesive unit of professionals with diverse skills and expertise, working together with the client's in-house team to deliver a specific project or set of projects. The composition and structure of a dedicated team can vary depending on the project requirements, but it typically includes a mix of technical and non-technical roles.

• Project Manager: The project manager is responsible for overseeing the project’s progress, ensuring it is completed on time, within budget, and to the required quality standards. They act as a liaison between the client and the development team, facilitating communication and resolving any issues that may arise.
• Business Analysts: Business analysts work closely with the client to understand their requirements, identify potential solutions, and develop a clear project plan. They ensure that the development team has a deep understanding of the project’s objectives, scope, and timelines.
• Software Developers: Software developers are the core of the dedicated team, responsible for designing, developing, testing, and deploying the software application. They work closely with the project manager and business analysts to ensure that the development process is aligned with the project’s objectives.
• Quality Assurance (QA) Engineers: QA engineers are responsible for ensuring that the software application meets the required quality standards. They develop and execute test plans, identify defects, and work with the development team to resolve any issues that arise.
• DevOps Engineers: DevOps engineers are responsible for ensuring the smooth operation of the software application in production. They work closely with the development team to ensure that the application is properly deployed, monitored, and maintained.

By having a well-structured dedicated development team, businesses can ensure that all aspects of the project are handled by experts, leading to higher quality outcomes and more efficient project management.

Benefits of a Dedicated Development Team

A dedicated development team offers numerous benefits to businesses, making it a highly attractive engagement model for software development projects. Here are some of the key advantages:

• Cost Efficiency: By hiring a dedicated team, businesses can significantly reduce infrastructure costs. There’s no need to invest in office space, equipment, or utilities, as the team operates remotely.
• Access to Global Talent: A dedicated team provides access to a global talent pool, allowing businesses to hire the best professionals from around the world. This ensures that the project benefits from diverse skills and expertise.
• Long-term Focus: Dedicated teams are committed to a project for the long haul, ensuring continuity and a deep understanding of the project requirements. This long-term focus helps in maintaining consistency and quality throughout the development process.
• Specialized Expertise: Dedicated development teams bring specialized expertise to the table. Whether it’s development, architectural design, or database management, these teams are composed of professionals with the necessary skills to deliver high-quality results.
• Full Control and Visibility: With a dedicated team, businesses have full control and visibility over the project. This allows for better project management, as clients can make changes and adjustments as needed to meet evolving project requirements.
• Dedicated Commitment: A dedicated team is fully committed to the project, ensuring that it is completed on time and to the required standard. This level of commitment is crucial for the success of long-term and high-profile projects.
• Easy Scaling: One of the significant advantages of a dedicated team is the ability to scale up or down as needed. This flexibility allows businesses to adjust to changing project requirements without the hassle of hiring or laying off staff.

By leveraging these benefits, businesses can enhance their software development capabilities, ensuring efficient and high-quality project outcomes.

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3. Fixed Price Model

As the name suggested, the fixed-price IT team engagement model primarily defines the agreed-upon payment plan between you and the nearshore talent partner. 

Under this model, the entire cost of the project is agreed upon at the beginning and may be paid upfront, upon completion, or distributed over various milestones in the course of the Software Development project depending on the terms set. 

Pros:

• Since the cost is pre-decided, clients are rarely at risk of going over the budget.
• The fixed price model requires extensive planning to communicate requirements and costs. This ensures that the deliverables are high quality and meet client expectations.
• The thorough research also means that teams can jump straight into Development and waste less time on clarifications.

Cons:

• Once requirements and budget are decided, there is less flexibility for changing the project's scope.
• The planning and research stage is long and tiring, and if not done correctly, can lead to poor-quality work.
• A long planning window means a longer time to market.

When to Use

• When project requirements and deliverables are crystal clear.
• You have a limited software development budget.
• Usually suited for small, short-term projects with little or no support required.

Check out our detailed software development cost guide to help you plan effectively for your next project. 

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4. Time & Material Model

The time and material IT team engagement model is quite the opposite of the fixed-price model. This engagement model calculates all Development costs based on the time spent. It is the most widely used IT team engagement model as it provides flexibility to the client and due compensation to the Developers.

Pros:

• You have the leverage to change the project’s scope at the expense of increased Development time and cost.
• It fits perfectly into the Agile working methodology, ensuring a smooth Software Development process and team management.
• It accommodates the possibility of support and constant development in the future.  

Cons:

• The per-hour billing can sometimes incentivize developers to delay their work unnecessarily.
• Clients are always at risk of going over the budget.
• The open-ended nature of the project and lack of clarity on deliverables can lead to poor development practices and lowered motivation.

When to use

• The time and material model suits prolonged, complicated projects with evolving end goals.
• Ideal for scenarios where project milestones or deliverables are flexible during the development phase.
• The time and material model is great for clients who envision constant development of their product in the far future.

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How a Dedicated Team Model Works

The dedicated team model is a structured approach that provides businesses with a team of professionals with specialized skills. Here’s a step-by-step overview of how this model works:

• Project Requirements: The process begins with the business defining the project requirements and specifications. This includes outlining the skills and expertise needed, the project scope, and the desired outcomes.
• Team Selection: Based on the project requirements, a dedicated team is selected. This team is composed of professionals with the necessary skills and experience to meet the project’s needs. The selection process ensures that the team is well-suited to handle the specific challenges of the project.
• Project Planning: Once the team is in place, the next step is project planning. The dedicated team works closely with the business to develop a detailed project plan, including setting milestones, deadlines, and deliverables. This planning phase is crucial for ensuring that the project stays on track.
• Project Execution: With the plan in place, the dedicated team begins executing the project. They work diligently to meet the set milestones and deadlines, ensuring that the project progresses smoothly. Throughout this phase, the team maintains close communication with the business to address any issues or changes that arise.
• Project Monitoring: Continuous monitoring is essential to the success of the dedicated team model. The team regularly reviews the project’s progress, making adjustments and changes as needed to ensure that it stays on track. This proactive approach helps in identifying and resolving potential issues before they become significant problems.

By following these steps, the dedicated team model ensures that projects are completed on time, within budget, and to the required standard, providing businesses with a reliable and efficient solution for their software development needs.

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Managing a Dedicated Software Development Team for Success

Managing a dedicated team requires a combination of technical, business, and interpersonal skills. Here are some best practices for managing a dedicated team:

• Clear Communication: Clear and effective communication is critical to the success of a dedicated team. Ensure that all team members understand the project’s objectives, scope, and timelines, and that they are aware of their roles and responsibilities.
• Regular Meetings: Regular meetings are essential for ensuring that the team is on track and that any issues are addressed promptly. Hold daily stand-ups, weekly progress meetings, and monthly review meetings to ensure that the team is aligned and focused.
• Agile Methodologies: Agile methodologies such as Scrum or Kanban can help dedicated teams work more efficiently and effectively. These methodologies emphasize iterative development, continuous improvement, and flexibility.
• Continuous Feedback: Continuous feedback is essential for ensuring that the team is performing at its best. Provide regular feedback to team members, and encourage them to provide feedback to each other.
• Recognition and Rewards: Recognition and rewards can help motivate team members and improve their performance. Recognize and reward team members for their achievements, and provide opportunities for growth and development.

By implementing these best practices, project managers can ensure that their dedicated teams are productive, motivated, and aligned with the project’s goals, leading to successful project outcomes.

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Finding and Hiring a Dedicated Team

Implementing a dedicated team model can be a challenging task, but with the right approach, businesses can ensure they find the perfect fit for their project. Here are some practical tips to guide you through the process:

• Define Your Project Requirements: Before you start searching for a dedicated team, it’s crucial to define your project requirements. This includes identifying the skills and expertise needed, the project scope, and the desired outcomes. Clear project requirements will help you find a team that matches your needs.
• Research Potential Teams: Conduct thorough research to identify potential teams. Look for teams with experience in similar projects, and evaluate their skills and expertise. Online platforms, industry forums, and professional networks can be valuable resources for finding potential teams.
• Check References: Once you have a shortlist of potential teams, check their references. Reach out to previous clients to get feedback on their experience working with the team. This will give you insights into the team’s reliability, quality of work, and ability to meet deadlines.
• Conduct Interviews: Conduct interviews with the shortlisted teams to assess their suitability for your project. Ask about their experience, approach to project management, and how they handle challenges. This will help you gauge their expertise and compatibility with your project requirements.
• Check Their Portfolio: Review the team’s portfolio to see examples of their previous work. This will give you a sense of their capabilities and the quality of their deliverables. Look for projects similar to yours to ensure they have relevant experience.

By following these steps, you can implement a successful dedicated team model that meets your project requirements and ensures successful project outcomes.

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Overcoming  Challenges and Limitations of Dedicated IT Team Engagement Model

While the dedicated team model offers numerous benefits, it also comes with its own set of challenges and limitations. Here are some common challenges and practical solutions to overcome them:

• Communication Challenges: Communication can be a significant challenge, especially if the dedicated team is located in a different time zone or country. To overcome this, establish clear communication channels from the outset. Use tools like Slack, Zoom, or Microsoft Teams to facilitate regular communication and ensure that all team members are on the same page.
• Cultural Differences: Cultural differences can impact collaboration and team dynamics. To address this, provide cultural training for both your in-house team and the dedicated team. This will help bridge cultural gaps and foster a more cohesive working relationship.
• Language Barriers: Language barriers can hinder effective communication and collaboration. To mitigate this, consider language training for team members or hire bilingual project managers who can facilitate communication between the teams.
• Security Risks: Working with a dedicated team, especially one located in a different country, can pose security risks. Implement robust security measures, such as Non-Disclosure Agreements (NDAs), secure communication channels, and regular security audits, to protect sensitive data and ensure compliance with industry standards.

By proactively addressing these challenges, businesses can maximize the benefits of the dedicated team model and ensure successful project outcomes when working with a software talent outsourcing vendor.

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How to Determine the Best IT Team Engagement Model for Your Software Development Needs

An appropriate IT team engagement model is essential as it directly impacts the quality of your software deliverables and the costs involved. There is no one-shoe-fits-all model, so you need to understand your requirements and conduct proper research before making a decision.

Here are a few key points for CTOs to consider before picking the preferred IT team engagement model for your organization: 

• Nature of the project: A small-scale, short-term project can best deliver under the fixed price engagement model. It keeps the development cost in check and ensures clear communication of requirements. On the other hand, a large, complex project may be better delivered under the time and material model and provide flexibility for increased development and innovation.

• State of the existing development team: Matching the project requirements with the available in-house specialists reveals whether a dedicated team is required or the ETM would suffice.

• Project state and scope: CTOs should consider whether the project is currently in development or is to be built from the ground up. Furthermore, whether the project will require further development after an initial completion.

• Client Budget: Your budget is probably the most significant deciding factor for any business conundrum. If the organization can spare additional money, the time and material model is suited to ensure quality Development. Otherwise, you may have to stick with the fixed price model and benefit from the cost of management and development flexibility.

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Conclusion

Staff augmentation is a valuable tool for IT organizations of all sizes. By leveraging the expertise of technology partners and remote talent, businesses can quickly and cost-effectively fill gaps in their teams, and complete projects on time and within budget, in addition to achieving their business goals.

Choosing the right software team engagement model is critical to the success of any nearshore Software Development project. For this reason, efficient Software Development and delivery can only be achieved by understanding the different models and their pros and cons and matching them up with your unique business requirements. Some of key factors to consider in this context include project nature, state and scope, in-house expertise, and budget flexibility.

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