When you outsource software development, you are choosing two things at once: who does the work, and how the work is organised and paid for. The second choice usually comes down to two models — a fixed-scope project or a dedicated team. Both work well. They fail when they are used for the wrong kind of work.
The two models in plain terms
A fixed-scope project is an agreed piece of work — for example, the first release of an app — with a defined scope, timeline and price. The development company plans the work, manages the team and is responsible for delivering what was agreed.
A dedicated team is a group of developers (and often designers or testers) who work on your product full-time. The development company employs them; you decide what they work on, usually through your own backlog, stand-ups and tools.
When a fixed-scope project fits
- The requirements are clear enough to write down and agree.
- There is a natural end point: a release, a migration, a redesign.
- You do not have the time or people to manage developers day to day.
- You need to know the cost before you start.
The trade-off is flexibility. Changing the scope mid-project is possible, but it is handled as a change request with its own estimate.
When a dedicated team fits
- The product will keep evolving and priorities change as you learn.
- You have someone — a product owner, CTO or technical lead — who can direct the work.
- You want developers to build up deep knowledge of your product over time.
- You need to grow or shrink capacity as plans change.
The trade-off is responsibility. With a dedicated team you set priorities and accept the result of each cycle; the cost depends on time, not on a fixed scope.
Who manages what
| Area | Fixed project | Dedicated team |
|---|---|---|
| Roadmap and priorities | Agreed in the scope | You |
| Day-to-day task management | Development company | You (or a manager you add) |
| Quality and testing | Development company | Shared; agreed upfront |
| Releases | Development company | Your process |
| Employment and replacements | Development company | Development company |
How each is priced
A fixed project is priced on the scope: the more precisely it is defined, the more reliable the price. Uncertainty becomes either a contingency in the price or a list of assumptions.
A dedicated team is priced on the people and the time — typically per person per month, depending on skills and experience. You pay for capacity and decide how to use it.
Neither is automatically cheaper. A fixed project with constant change requests can cost more than a dedicated team; a dedicated team without clear direction can spend time on the wrong things.
Scope changes, risk and intellectual property
- Scope changes: cheap with a dedicated team, formal with a fixed project.
- Delivery risk: carried mostly by the development company in a fixed project, and shared in a dedicated team.
- Intellectual property: in either model, the contract should state who owns the code, designs and accounts. Agree this before work starts.
Offshore realities: time zones, communication and contracts
Working with an offshore team — for example, a team in India working with clients in the US, UK or Australia — adds practical questions:
- Time zones. Agree a daily overlap for stand-ups and questions, and use the time difference for work that does not need you.
- Communication. Decide the tools (chat, issue tracker, video calls) and the rhythm (daily stand-ups, weekly demos) at the start.
- Contracts. Cover ownership, confidentiality, notice periods and how people are replaced if they leave.
Switching models mid-way
Many products use both models over their life. A common pattern is to build the first release as a fixed project, then continue with a dedicated team once the product is live and priorities change weekly. Switching works best when the code, documentation and accounts were kept in your company’s name from the start.
If you are deciding between the two, see how our dedicated developers work, or tell us about your project and we will suggest the model that fits.