Aug 27, 2020 | 6 min read

How a Dedicated Development Center Can Help Your Business

Pavel Kaplunou, Marketing Communications

If you have ever had to hire software developers, you will know that it is often difficult to align technology with business needs. For most young companies, having in-house developers is not an option. Instead, they look beyond borders to hire dedicated development teams. 

However, a dedicated development team is not always the same as a dedicated development center, or DDC. When you read about how outstaffing and dedicated development teams help technology startups with software development, these terms seem interchangeable. In reality, the difference is a little more subtle.

While both terms relate to continuous development and talent sourcing models, they also encroach upon pricing and overall staffing. Below we go thorough the definition, differences, functions, and benefits of DDCs, with a focus on small-medium business.

What is a dedicated development center

The dedicated development center is a staffing method in which the client lets the service provider fully manage their software development, support and maintenance needs. The dedicated developers service one client full-time and work from a centralized location managed by the service provider.

Working with a dedicated center the client is free to choose the degree of their involvement with the team and processes. They can either directly manage the work as a project lead or relay that function to the provider’s team, focusing instead on running their business.

In many ways, it is a stripped down version of the shared service center model designated specifically for IT services and software development. Here the service provider can also supply QA specialists, business analysts, project and product managers, as well as other specialists with the relevant technology competencies.

Dedicated development center definition

Dedicated development center functions

When a company enters a dedicated development center contract, it should expect to receive the following—people, infrastructure and processes.

People

Your service provider will have the tools and data to quickly hire a team of people with the appropriate domain expertise. This includes recruitment, vetting, interviews, and knowledge transfer to bring them up to speed on the project. The client can always run additional interviews and screen software developers for culture-fit to create a truly integrated team.

Infrastructure

When the software developers come on board, the service provider supplies the facilities and instruments for the client’s dedicated team. The software engineering team will therefore have an office space and all required hardware and software to commence work.

Processes

For continuous development software teams will rely on tried-and-tested development and management practices such as DevOps, Agile, Scrum, PMBOK and others. The service provider should be able to offer methodologies relevant to the client project’s scenario. What is more, the client also has their say in defining the project’s processes.

Dedicated development center functions

Dedicated development center vs dedicated development team

In most contexts, the terms dedicated development center and dedicated developer team are used synonymously. To some extent this is justifiable. And yet, there is a difference between the two. To fully understand it, it is worth looking at two other staffing models—dedicated team and outstaffing

With outstaffing, the client essentially creates a remote or mixed team, combining in-house software developers with those sourced from the service provider. Outstaffing is normally used on a short or mid-term basis to temporarily close certain positions or to quickly reach a specific project goal. As part of the model, the augmented staff therefore integrate with the infrastructure and processes already used by the client.

The dedicated development team model, on the other hand, refers to a scenario when the service provider supplies the people, processes and infrastructure to the client. The team is normally managed by the provider’s own project lead, or with the help of an intermediary from the client’s side.

What’s the difference between a dedicated dev center and a dedicated team then you ask? Simply put, a DDC has a deeper integration with the client’s business. This makes the center the client’s default technology division.

This includes a close degree of cooperation between the business’s departments that will rely on the DDC’s expertise and support. A close merger of processes and operational infrastructures effectively does not distinguish between the two as being a separate entity. Smart IT currently runs several DDCs for clients from different parts of the world.

When to sign a dedicated development center agreement

Continuous software development normally implies establishing a non-project based collaboration. Project-based work is typically more suitable for companies with a fixed development budget working on producing a specific set of deliverables. Continuous development, on the other hand, requires a long-term commitment.

Because a DDC can accommodate both the client’s business unit, or collaborate with multiple divisions at the same time, the model is a good match for technology startups and medium businesses.

On the one hand, startups that wish to launch an innovative product to market fast, but do not have in-house resources to do so, can benefit from a dedicated dev center contract. At the same time, mid-sized businesses expanding the scope, as well as the range of their products and services, can rely on dedicated developers to expand their capabilities

Moreover, compared to hiring dedicated development teams in economically developed countries, DDCs will normally source from local pools in countries with lower cost per employee. This can significantly lower production costs for digital products and services, saving the client a big chunk of their operational budget.

Benefits of a dedicated dev center for small businesses and startups

Companies working with a dedicated dev center stand to gain several advantages over competitors working with internal IT departments. 

First and foremost, by contracting services from another company, there are no taxes involved with hiring an employee directly. The client does not have to take into consideration employee benefits, infrastructure costs or worry about overheads traditionally linked to new hires.

A service provider offering to establish a DDC will therefore help its clients cut operational costs, while providing highly skilled and qualified professional resources. Moreover, the service provider will bear full responsibility for the work of its employees and help mediate the agreement terms.

The composition of the dedicated center can be scaled based on demand for human resources and adjusted for cost efficiency. For companies working with rapidly changing markets, DDCs give them the agility to excel in their domain, while working on their own terms.

Dedicated development center benefits list

All in all, DDCs can become a strategic ally in bringing products to market and expanding the scope of services, especially for younger companies operating on a budget or still building their core team.

Hopefully, we have helped draw the line between a dedicated development center and a dedicated team. Next time you are looking to hire dedicated developers, you will be well-equipped for the task, having weighed the pros and cons of the service model you want to choose.

27 August 2020

WRITTEN BY

Pavel Kaplunou , Marketing Communications

Pavel is Smart IT's Marketing Communication Manager. He oversees content creation and is in charge of the official Smart IT blog. Contact Pavel to learn about potential media and content collaborations. p.kaplunou@smart-it.io

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