Dedicated Teams: When Does the Model Really Pay Off – and What Do Companies Need to Consider?

Many companies are currently facing the same challenge: the demand for software development is growing, qualified specialists in Europe are becoming increasingly expensive, and price pressure on applications is rising – not least due to the use of AI. Classic in-house developers in Switzerland are simply too costly for many projects.

A dedicated team – an external development team that is firmly assigned to your company – seems like an ideal solution.
However, for this model to truly pay off – technically, organizationally and financially – several key points need to be taken into account.

1. A Clear Business Case Instead of “Let’s Just Try It”

A dedicated team should not be launched based on gut feeling, but on a clear business case:

• What goals are you trying to achieve?
  e.g. faster time-to-market, reducing backlogs, building new products, 24/7 operations

• Which costs are being replaced or avoided?
  e.g. lower recruitment costs, less freelancing, reduced fixed costs for in-house teams

• What is a realistic timeframe?
  Dedicated teams usually unfold their full value over several years, not in three months.

Without clear objectives, the team quickly becomes just “additional capacity” that costs money but delivers no measurable added value.

2. The Right Setup: Team Structure and Skills

A dedicated team is more than just a group of developers. You need the right mix of roles:

• Software Engineers (Junior, Mid, Senior)

• QA / Test Engineers

• DevOps / Cloud / System Engineers

• UX / UI, Business Analyst / Requirements Engineer (depending on the project)

• Team Lead / Tech Lead as the central point of contact

It’s crucial that the team is built complementary to your in-house team:

• What should the internal team continue to do?

• Which areas are deliberately handed over to the dedicated team?

• Where do you need overlap to ensure knowledge sharing?

The clearer the scope, the easier the governance – and the better the utilisation.

3. Roles and Responsibilities: Who Decides What?

One of the biggest risks is unclear responsibilities between the customer and the dedicated team.

A simple and proven setup looks like this:

• Product Owner (client side)
  Responsible for priorities, business value and roadmap.

• Team Lead / Delivery Lead (dedicated team)
  Responsible for delivery, quality and planning within the team.

• Shared Definition of Done & quality criteria

The key is to ensure that not “everyone decides a little bit”, but that responsibilities are explicitly defined – ideally documented (e.g. in a RACI matrix).

4. Integration into the Client’s Processes and Tools

A dedicated team only delivers its full value if it can work like a true part of your organisation:

• Access to the same tools (Jira, Azure DevOps, GitLab, Confluence, M365, etc.)

• Integration into existing processes (sprints, plannings, reviews, retrospectives)

• Clear rules for code reviews, merge strategy, branching and releases

A common problem: the external team is managed “on the side”, with separate tools and its own ticket system. The result is media breaks, duplicate work and coordination issues – and suddenly the model looks more expensive than it actually is.

5. Communication: Closeness Doesn’t Happen by Itself

Nearshoring only works with planned, structured communication. Success factors include:

• Fixed rituals: Daily stand-ups, weekly management syncs, joint sprint reviews

• Clear language rules: Who communicates in German, who in English? Which documents need to be bilingual?

• Transparent status reporting: Simple, recurring reports on progress, risks, velocity and capacity

Especially important: a strong contact person on the client side who is available to the team and drives decisions forward.

6. Onboarding & Knowledge Transfer – The Key to Profitability

The first weeks determine whether a dedicated team will be more productive in the long run than a purely internal team – or not.

This includes:

• A structured onboarding plan (systems, business context, stakeholders, processes)

• Joint workshops on architecture, domain logic, coding guidelines

• Pair programming / shadowing during the initial phase

• Well-maintained documentation instead of relying on “informal knowledge only”

Yes, onboarding takes time. But without this investment, the team will remain slower, make more mistakes and require more rework – which will eat up the cost advantage.

7. Metrics & Measuring Success: Is It Really Worth It?

A dedicated team should not just “feel good”, it should deliver measurable value. Useful KPIs include:

• Lead time for requirements

• Number of features delivered per sprint / quarter

• Quality (bug rate, defects after go-live, rework)

• Stability (staff turnover in the team, downtime)

• Financial metrics (cost per story point / feature compared to the in-house model)

Important: KPIs should not be used for “surveillance”, but as a management tool – to help the team improve together with you.

8. Cost Traps You Should Avoid

To ensure a dedicated team is truly economically viable, companies should keep an eye on the following:

• Teams that are too small for too long
  A 1–2 person team is often too fragile and doesn’t scale well.

• Constantly changing priorities
  If the team is working on completely different topics every two weeks, you lose a lot of efficiency.

• No influence on team composition
  Good partners allow you to have a say in the selection of team members.

• Hidden extra costs
  e.g. for licences, onboarding or travel – these should be clarified upfront.

9. Culture & Team Spirit: External, but Still Part of the Whole

A dedicated team may be located at a different site, but it should not be perceived as an “alien body”:

• Inclusion in townhalls, all-hands meetings and internal news

• Joint workshops on site (mutual visits)

• Appreciation and feedback just like for internal employees

The more the team identifies with the product and the company, the higher the motivation, quality and loyalty – and the more the model pays off in the long term.

Conclusion: Dedicated Teams Pay Off – If You Treat Them Like Your Own Team

A dedicated team is not “cheap outsourcing”, but a strategic extension of your own development organisation.

It pays off especially when:

• goals and business case are clearly defined,

• roles, processes and communication are well structured,

• you invest in onboarding and integration,

• and success is continuously measured and jointly optimised.

If you treat your dedicated team like a truly integrated part of your company, you benefit from higher speed, greater flexibility and measurable cost advantages – without compromising on quality and stability.