Finding good developers has become increasingly challenging. This has created a wave of problems for companies, as projects and new products are taking longer to be implemented, or even not getting off the ground. Keeping this in mind, software houses (or software factories) have created a service that fills the gap of the shortage of professionals, and this is Squad as a Service.

Squads as services, developer allocation, or even software development outsourcing are terms that refer to the same service: hiring external developers to increase the capacity of your development team or even to fully develop your software.

In this article, we will cover:

• What is a squad?
• Key advantages of software outsourcing
• When is the best time to hire a squad?
• Differences between the main development outsourcing models
• Cost reduction

What is a squad?

In traditional development management models, various challenges can be encountered, from defining scope to implementing functionalities, which can vary significantly depending on the needs of a software project. Now, when we talk about agile methodologies, such difficulties are already anticipated by their processes.

In agile methodologies, we have various professionals involved in the process, such as product managers, product owners, tech leaders, DevOps, among others. Everyone will function as a team focused on your project. The advantages of this structure lie in the ability to change and adapt development in real-time.

This working model became widely popular, thanks to Spotify. With the platform’s growth, they needed a reliable model for scalable expansion.

– Okay, but if I adopt agile methodologies with my development team, it’s the same as hiring a squad as a service, right?

Quick answer: no.

Hiring a service that outsources the development itself brings various benefits. From reducing costs in the long run to achieving a faster return on investment.

Squad as a service: key advantages of development outsourcing

Hiring a third party to develop software or even a squad to augment the capacity of your internal programming team has numerous advantages. Some of them include:

• Faster return on investment
• Flexible and self-sufficient teams
• Experienced teams
• Predictable budget
• Service squads can adapt to project needs
• Improved communication with the team.

Below, we will further explain each of these advantages.

Faster return on investment

Hiring and training new team members takes time and resources. The ability to quickly turn specifications into functional software is what some development companies excel at.

When you outsource development work, the entire hiring and training curve decreases, resulting in reduced investment and time.

Another crucial aspect is that reputable development companies, having worked on various projects, can understand client needs and even avoid some common errors, unlike inexperienced teams.

Flexible and self-sufficient teams

Projects can scale up or down, which can be a costly endeavor.

Requirements and deadlines may change, and projects may need a flexible team to complete them.

Specialized development companies have the ability to quickly scale a project team in any required area. Depending on the client’s needs, members can be added or removed at any time, respecting the scope and schedule affected by the change.

Moreover, all the necessary skills for project development can be easily found. With a team of business analysts, designers, testers, and managers, the project has a much higher chance of being completed with the expected quality and within the deadline.

Experienced teams

Local teams may work on the same project for years. Outsourced teams typically complete a project every six months!

The level of experience that consultants bring is invaluable. They have seen and worked on all kinds of projects and usually know what works and what doesn’t during development. This factor can shorten the delivery time and generate better products.

Predictable budget

Estimating the budget with a partner company is usually much easier than estimating the cost of a project with an internal team. Costs of recruiting, training, and adapting a team can make a project unfeasible.

When you engage an outsourced company, after a requirements analysis stage, you typically have the monetary and time effort to develop a set of features. If you have an evolving scope or features change based on market feedback, outsourced companies can accurately predict the value of a development Sprint (an effort of fifteen to thirty days).

In this sense, it’s easy to understand the project costs and promptly calculate the return on investment.

Squads as a service can adapt to project needs

Imagine this scenario: you’re developing software, and during the process, you realize it would be very interesting to have a data dashboard that provides insights for customers, but this feature requires a professional with AI knowledge.

In traditional models, you would have to start searching the market to hire one of these new professionals, and this would delay the project’s completion. When you hire a squad as a service, changes to the team structure are simple because within the software house, there are various professionals from different areas available to be allocated to any project.

Moreover, the product manager will ensure that the allocation of this new professional is done in a way that does not delay any other feature developments within the software.

Better communication with the team

Developers may not be within your company; however, through established product management practices, a development company can quickly gain an understanding of the rules and restrictions of a specific market.

Thus, some companies can assimilate the culture and specifics needed for a project and speak the language of the client.

For all intents and purposes, we are a part of your company.

When is it best to hire a squad?

When hiring a squad as a service, we should pay attention to the following points:

• What is the investment in agile squad allocation?
• Should I work with a closed or open project scope?
• How to choose the best option?

What is the investment in agile squad allocation?

In summary, the cost to allocate a development squad ranges between R$30,000 and R$150,000. However, this can be even lower or higher, depending on the number of professionals you need for your team, whether it will be remote or in-house, and the payment model.

Firstly, it’s important to note that there are two pricing models commonly practiced in the market:

• On-demand
• Pre-defined monthly payment.

It’s also worth mentioning that you can opt for remote hiring or even an “in-house” approach, bringing developers to work within the company. The second option is often chosen by companies that require greater security in the development process, such as banks or those dealing with sensitive data.

Should I work with a closed or open project scope?

An open or closed project scope essentially boils down to whether you have an exact plan of what needs to be done or anticipate changes to your project over time.

Squads are particularly well-suited for projects with an open scope, as you can adjust costs by expanding or reducing the size of the hired squad. However, in this model, project costs lack predictability.

On the other hand, if you want to ensure how much the entire project will cost while having a higher investment security for a feasibility plan, your path is towards a closed scope.

How to choose the best option?

In the end, both models work very well. What happens is that each one has different perspectives that should be evaluated according to the company’s needs and investment capacity.

With squad allocation, you gain speed and flexibility because instead of frequent individual hires, a team is allocated and available for incoming demands.

However, the disadvantage is that the company may create false expectations of deliveries, believing that the team will achieve a development goal. This is because a complete plan, as in the closed scope, was not made.

On the other hand, when allocating a development team for the production of software with a closed scope, the company has more certainty and security throughout the journey it can undertake. The disadvantage, in this case, is the lack of flexibility in scope changes.

Moreover, it requires a lot of time for planning and a complete understanding of the demand, which can range from 30 to 90 days, depending on the scope’s size.

In summary, ultimately, the best choice is:

• In the case of high software demand and a need for more speed, squad allocation is recommended.
• If the company has time to think and plan, it can confidently opt for closed scope planning.
• In situations of urgent need but also many uncertainties, the ideal choice is squad allocation.
• When it’s crucial to have more certainty about costs to attract investment or gain approval, it’s better to work with closed scope planning.

Differences between the main Development Outsourcing Models

Engaging a squad as a service or even a dedicated development team can yield highly positive results. For instance, it provides greater control over costs, delivery timelines, and allows the business to maintain focus on its core operations.

However, for your company to make the right choice in selecting this service, consider these tips on how to hire outsourcing:

• Define your current needs
• Analyze potential candidate companies
• Don’t forget the SLA (Service Level Agreement).

Define your current needs before hiring a squad

You’ve already realized that it’s ideal for your company to engage in IT outsourcing, but do you know your specific needs? These needs can range from cost reduction to the modernization of your services.

When hiring a software factory, the more details you have about your needs, the easier it will be to identify companies with the most potential to do the job.

Therefore, if your current need is customer loyalty, for example, the path to achieving that could involve developing an application. In this way, outsourcing should have a good understanding of your business philosophy and the needs of your audience.

And if, in addition to the application, there is also a need for software development to modernize the work methodology, it’s not necessary to do everything at once.

One of the advantages of hiring outsourcing is that they also have a business-oriented perspective beyond their technological knowledge. Therefore, they can help you identify the right time to make a change.

Analyse the candidate companies

After listing your business needs and the type of knowledge software providers should have, it’s time to learn more about the professionals who have your preference.

It’s important that they share your philosophy and envision future changes. Additionally, they need to identify improvements that can be made during the development of the system your company needs.

Check if each software factory has quality certifications. Furthermore, seek the opinion of clients who have already hired their services and inquire about the software they have developed.

Don’t forget the SLA

The SLA (Service Level Agreement) is a detailed agreement outlining how the work will be carried out. This includes deadlines and how the outsourcing company will handle customer service.

This agreement serves as a guarantee that the service will be delivered within your expectations and also helps the software factory understand your needs.

Keep in mind that this agreement should be drafted before finalizing the deal. Additionally, you should be aware of the solutions your company needs, making it easier to discuss these points with the service provider.

In conclusion, good communication with the outsourcing company you have contracted will ensure that no doubts or distorted information hinder the development of your system.

A model designed to accelerate your projects and reduce your expenses

A crucial point that should be emphasized is the reduction of costs.

— How so? If I’m going to hire an external company, it’s understood that I will increase costs, so how can the squads as a service model reduce costs?

Quick answer: in hiring.

The first point is that hiring developers is a very costly and time-consuming task. The second is that there are stages in the development of your software where you may no longer need a specific specialization in the team. However, if you have hired someone to perform that role, you cannot part ways with that workforce without additional costs.

Therefore, hiring a squad brings the flexibility to expand or contract the size and budget of the project. Consequently, upon reaching a project goal, you can reduce the number of programmers in the team without additional termination costs.

Ubistart is a software factory that develops customized solutions for companies looking to improve their processes and explore new ways of engaging with their customers. Contact us to learn more!