Project-Based Development, really?

In today's rapidly evolving business environment, it is crucial for companies to keep pace with technological changes and manage their internal processes efficiently. Companies often face challenges when choosing the appropriate development approach for their applications. Three main models frequently discussed are project-based development, hybrid teams, and dedicated teams. Let's look at the advantages and disadvantages of each approach and their pricing models.

What is Project-Based Development?

Project-based development is a traditional methodology where software is developed according to a predefined specification, with a fixed deadline and budget. In this approach, the phases of development are carefully planned, and any changes during the project can lead to significant adjustments in time and costs.

What are Hybrid Teams?

Hybrid teams combine elements of traditional project-based approaches with agile methodologies. In this model, developers from the client and the supplier work together as one team. Applications are developed incrementally, allowing for ongoing testing and adaptation to changing requirements. The cost is based on the actual hours worked, offering greater flexibility and realistic deadline estimates.

What are Dedicated Teams?

Dedicated teams consist of developers who focus exclusively on the development of a single product. This model provides deep focus on the project and allows the team to gain extensive knowledge about the product, leading to more efficient development and faster problem resolution.

Project-Based Development: Advantages and Disadvantages

Advantages:

1. Clearly Defined Penalties and Deadlines:Project-based development allows for easy establishment of penalties for missing deadlines. However, to minimize risks associated with penalties, deadlines and prices are often inflated to create a buffer, unnecessarily increasing project costs.
2. Complete Application Delivery:The application is delivered as a whole, which can simplify the client's testing process. On the other hand, when errors are discovered, these errors must be classified and predetermined on how they will affect the deadline.

Disadvantages:

1. Overpriced Projects:Due to the need to create buffers for potential penalties, projects often become unnecessarily expensive. Additionally, if changes in the specification occur, new deadlines and prices must be negotiated, leading to further delays and increased costs.
2. Bureaucratic Processes:Project-based development can lead to excessive bureaucracy, disrupting good relationships between the supplier and the client. If penalties are imposed, the supplier might stop cooperating on further projects, leading to additional costs associated with finding a new supplier.

Pricing Model:

Project-based development requires a complete specification at the start, on which an estimate is made. This estimate is typically inflated by 30-40% to account for communication, documentation, and other necessary activities. Additionally, another 40-50% of the cost is added to cover potential delays and penalties. This model results in high initial costs and often leads to unnecessary project overpricing.

Hybrid Teams: Advantages and Disadvantages

Hybrid Teams:

1. Realistic Deadlines and Costs:
   ‍The cost is based on the actual hours worked, allowing the client to validate the hours and avoid unnecessary overestimation. Deadlines are communicated more realistically since the estimates are made by the entire hybrid team, composed of both client and supplier developers.
2. Incremental Delivery and Testing:
   ‍Applications are delivered in parts and tested incrementally, reducing the likelihood of bugs reaching production. This approach also allows for greater flexibility and easier implementation of specification changes.
3. Collaboration and Flexibility:
   ‍Hybrid teams enhance collaboration between the client and supplier, leading to better communication, a shared understanding of goals, and quicker responses to changes.

Disadvantages of Hybrid Teams:

1. Potential Delays:
   ‍Discovered bugs or team member illnesses can extend deadlines, although this does not financially increase the cost. However, this approach allows for better project management on the client’s side.
2. Fewer Penalties:
   ‍Less ability to penalize the supplier can be a disadvantage for companies requiring strict adherence to deadlines. However, this approach often leads to better collaboration and less bureaucracy.

Dedicated Teams: Advantages and Disadvantages

Dedicated Teams:

1. Focus and Expertise:
   ‍Developers focus solely on one project, allowing them to gain deep understanding of the product and resolve issues faster.
2. Faster Iterations:
   ‍Thanks to the deep focus on the product, dedicated teams can perform faster iterations and innovations.
3. Better Communication:
   ‍The team has clearly defined goals and responsibilities, improving communication and efficiency.

Disadvantages of Dedicated Teams:

1. Higher Costs:
   ‍Maintaining a dedicated team can be expensive, especially for smaller companies.
2. Dependency on the Team:
   ‍The company becomes heavily dependent on one team, which can be risky if the team is not stable or if team members are unavailable.

Pricing Model:

In hybrid and dedicated teams, payment is always made based on the actual hours worked, allowing for precise cost tracking and more efficient budgeting. A significant advantage is the ability to start the project immediately and gradually create the specification. This approach provides flexibility and the ability to adapt to changing requirements without unnecessary cost inflation.

Conclusion

For growing companies facing challenges in managing internal processes and needing an efficient and flexible development approach, hybrid teams and dedicated teams appear to be the better choice. They offer realistic estimates, flexibility in specification changes, and reduced bureaucracy, leading to better collaboration and more efficient application development. Dedicated teams provide deep expertise and fast iterations, although at the cost of higher expenses.

Project-based development brings bureaucracy, which can be counterproductive and disrupt good relationships between the supplier and the client to the point of ending cooperation. Penalties encourage overestimation of deadlines and costs, leading to the creation of time buffers and increased costs. In the end, project-based development is more expensive and less flexible compared to hybrid approaches.

The right approach depends on the specific needs and resources of the company. Hybrid teams and dedicated teams provide a balanced solution, combining flexibility with focused expertise, making them ideal for companies seeking to grow and adapt in a dynamic market environment.

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