Dedicated teams are teams of programmers and developers who work exclusively for specific clients. For instance a dedicated team could be used to provide services such as an offshore product development centre (ODC), a product support help desk, for business process outsourcing (BPO) or for outsourcing product development (OPD).
These are very different models from fixed priced outsourcing which involves paying for the implementation of a specific task; they are paid for on the basis of consolidated monthly fees and have a great deal of flexibility in terms of up-scaling and down-scaling according to changing project requirements.
Comparison of dedicated teams and fixed price models
With fixed price projects it is necessary to be entirely clear about exactly what the project entails and what needs to be developed. If this isn’t the case then estimates of the workload are likely to be inaccurate. In order to allow for inaccuracies and other contingencies it is necessary to add a margin for these when pricing such projects and the projects can be less cost effective than using dedicated teams.
With a dedicated team these constrains don’t apply. The cost model is based on paying a consolidated monthly fee and the workload is far more flexible with the possibility of partitioning it between offshore and onshore teams. The primary motivation for outsourcing dedicated teams offshore is the cost saving compared to hiring similar teams onshore. The organisation outsourcing the team (the client) is able to influence the selection of team members, their training, and team building.
Additional cost inefficiencies in the fixed price model occur when clients need to commission several projects. In such cases there is a lack of knowledge cohesiveness and there are new learning curves that must be climbed on each occasion which is both costly and time consuming.
However with dedicated teams the accumulated knowledge that is gained over time is an important asset that is retained within the team and utilised in future project sets.
Overall the advantages of an outsourced dedicated team include:
• Increased flexibility as there is not a requirement for a complete specification at the outset of the project
• There is flexibility regarding workload requirements
• Much greater clarity regarding the status and progress of the project
• A synergistic relationship can be established between the offshore team and onshore staff with direct communications that are not interleaved by layers of management
• A dedicated team is more cost effective as there is no need to price for contingencies
• The client retains control of the team just as if it was an existing of the on-premise team
• There is far better control of IP which is retained within the dedicated team
• Knowledge is conserved as the team gains experience which it is able to apply to similar project sets
We believe that the dedicated team model is the best and most cost effective solution for offshore outsourcing particularly for long term projects and project sets. As the team gains knowledge and experience its effectiveness increases and the developing relationship between your outsourced and in-house teams become increasingly synergistic with potentially highly beneficial results.