The Bureau of Labor Statistics predicts that the demand for software developers, quality assurance analysts, and testers will rise by 15% between 2024 and 2034. The main reason for this jump is the growing demand for software across various fields, including artificial intelligence, connected devices, and robotics. Additionally, organizations that most need engineering talent now have to compete with other employers to attract skilled workers. For this reason, assembling a software development team before the first hire is critical to success.
There is more than one way to build a team. Some companies hire in-house for long-term ownership. Another product can bring in a dedicated development team to move faster or close a skills gap, and many run a blend of both. This guide covers how to build a software development team. We will clarify the structure, roles, team size, cost drivers, and hiring order behind each path—so the choice comes down to fit.
What Is a Software Development Team?
A software development team is a group of professionals involved in developing, constructing, testing, and maintaining software. In other words, it’s a group of developers, a QA engineer, a designer, and a project or product owner.
How to build a software development team from scratch? First, remember: these roles are distributed among the software development team members. Each has a separate area of responsibility, grouped into the development, testing, release, and support phases that cover the entire development cycle. The structure of members may vary depending on the product and its needs. Composition matters as much as size. So, only the right structure allows avoiding delays in development, avoiding defects, and reducing costs due to rewrites.
Software Development Team Structure
The first step to building a team is choosing a team structure. Here are the three most common types of team structures. Your choice will depend on the nature of your projects.
Generalists
A generalist team includes people with a vast knowledge base and a wide-ranging skillset. Members of such teams use various resources and leverage their skills to tackle a wide variety of tasks. They also have good communication skills and are usually keen on lifelong learning. When it comes to software projects, companies usually find full-stack developers to build a generalist team. With AI assistants handling routine boilerplate, test scaffolding, and debugging, an AI-augmented generalist can cover work that once needed an extra specialist. It pushes the calculus toward smaller generalist teams for early-stage builds.
Specialists
As the term implies, a specialist team structure includes members with experience in solving particular challenges and working with particular tools. These members are adept at a single skill set or methodology and can apply their expertise to solve complex problems. Having specialists on a team is important for addressing a specific part of software development, for example, developing or infixing an augmented reality (AR) feature. Likewise, you would need manual quality assurance (QA) experts or QA automation engineers to cover the testing stage of your software development lifecycle. In this case, an AI-augmented generalist addresses the concern that a specialist is better at some tasks. For example, it can be determining which query optimisations are safe to apply given systems under production, but not change the fundamental economics of the situation.
Hybrid
A hybrid software team comprises both generalists and specialists. Such teams usually thrive at managing a wide array of projects that address different areas or issues simultaneously. Hybrid teams not only efficiently fix specific problems in a project but also address other areas as needed. If AI-augmented generalists perform more of the easy work here, the economics change, allowing hybrid teams retaining only for the most challenging tasks.
Software Development Team Roles and Responsibilities
Product Owner
This role represents the customer and more specifically manages the product vision. A product owner makes sure the developers know who the end-users of the product are and what they want. The specialist is responsible for prioritizing requirements, setting the product vision, and managing the backlog.
For example, a product owner would decide whether, for a fintech lending app, the next iteration should focus on developing a faster way to approve loans or a more convenient way to schedule repayments. They would set which Know Your Customer (KYC) fields are mandatory for a customer to sign up for the app. A product owner would also determine the acceptance criteria for a given requirement, ensuring the credit decision is made in less than 3 seconds. In the case of an outsourced project, the customer would take on the role of a product owner, setting the vision for the product.
Project Manager
The project manager is in charge of delivering the project in a timely manner and under budget while controlling the project scope, schedule, and budget. They make sure that the control plan is developed, the deliverables are defined, project governance is established, and the project team is in place. This specialist also checks whether priorities are set in resource allocation, the Scrum model for agile development is set up, and whether reporting is done to stakeholders. These professionals help involve the stakeholders in project planning and project meetings.
Business Analyst
Translates business and stakeholder requirements into technical specifications for the project team, ensuring the product meets them. They also document requirements, verify that the developed software meets them, and analyze any discrepancies between stakeholder requirements and the implemented functions. Business Analysts ensure that the implementation plan meets the required standards.
Team Lead
The team lead is responsible for the day-to-day leadership and management of the team of developers. While usually not coders, team leads differ from senior developers in that the senior developer is accountable for their code. In contrast, the team lead is accountable for the team's code.
Similarly, Team Leads are the single point of contact to the project manager and stakeholders. The individual often begins to see themselves as a team lead when they show the ability to scale their performance and impact beyond their own work, for instance, when they start coaching others.
Software Architect
Define the overall system design, determine the system’s component structure and interactions between its elements, integrate the system into the existing environment, select the technologies to be used, and ensure technical feasibility. They help the team resolve technical issues during development that interfere with the project’s implementation. Their role is critical during the early stages of development, where revisions are particularly costly.
Software Developers and Engineers
Build applications and software systems using the requirements defined by the product owner. Front-end developers focus on developing the application’s interface. The back-end developers focus on developing the application’s logic and systems.
Developers estimate the technical effort required to deliver specific features, capacities, and bug fixes, provide input on potential technical risks and roadblocks, and report progress and status to the team lead or project manager.
UI/UX Designers
The role is to build an application or software interface and convert it into a visually appealing layout that enables easy interaction. The work of the designer is to ensure that the information that the user needs to see is in the most easily accessible place and (when applicable) is easy to review and scan without needing to wade through choices.
The designer also ensures that the interface adheres to the necessary compliance norms, such that critical information and disclosures are visible to users throughout their journey with the application. They must also ensure that the design does not disrupt the user's context, which would slow the application’s performance. The right application design could reduce the need for rework, thus shortening the development cycle and reducing costs.
QA Engineer
Check if the developed software meets the requirements and quality standards. They develop and execute test cases, both manual and automated, check the software for bugs throughout the development process, and perform final acceptance tests from an end-user perspective. Finding and fixing a bug during testing is significantly cheaper than doing so after the product’s release. QA leads define the testing strategy and guide the QA engineers in larger software development teams.
DevOps Engineer
Responsible for ensuring that the end-user performance expectations are met while developer-built applications can be deployed consistently and reliably. They enable the software delivery process, paving the way for high-quality software. DevOps specialists build the tools and infrastructure for automated testing and deployment of the application’s components across various environments.
They also facilitate DevOps automation, ensuring that any application modifications can be deployed to production within minutes. The professionals responsible for the cloud application’s upkeep collaborate with other individuals in a cloud-based milieu to make sure that it is configured appropriately. The DevOps engineer puts in place a mechanism for creating the rollback process for any release and change that fails due to an unexpected incident in production.
Data/AI Engineer
During the development of a software project, these professionals develop the data infrastructure and data processing pipelines for a product or service. They prepare the environment for implementing AI-enabled features, such as machine learning algorithms, and ensure that it can support the selected data management solutions under production demands. This role becomes extremely important in AI-powered products, as such technologies rely on data management solutions for both performance and security.
Subject Matter Expert (SME)
Own domain-specific expertise that the core team lacks, such as regulatory compliance in healthcare or finance, or the peculiarities of particular hardware in mechatronics. SMEs can be hired for the duration of the project’s development to provide the domain knowledge needed to create compliant and capable software. They may also advise on how to build a process or architecture for a particular project properly.
Development Team Hierarchy
How to Build a Software Development Team in 7 Steps
The structure and roles presented above give an insight into what the development team should be. Let’s discuss how to build a software development team, detailing the steps below.
Step 1. Define Project Goals and Requirements
Team composition follows from the project's requirements. So, first determine what you want to create, and only then decide who is needed to create it. Firstly, it is necessary to draw up a list of product requirements and the set of tools needed for its development. This plan should cover the year or two. Then, think about what kind of project this is:
- Is it a 100% original product?
- Are you taking an old one and making it work on new devices?
- Are you just making an existing solution work better?
This step is one of the most essential since it directly relates to determining the further work plan, as well as the required staff and their qualifications. Here it goes:
- The product requirements are like a map that shows you where you are going.
- The target build is like the road you will take to get there.
- The product is what you are trying to make.
The more precisely the requirements — such as functional and non-functional — platforms, and technologies are defined, the easier it becomes to determine the right team composition to deliver them.
Step 2. Choose the Team Structure
Depending on your project’s goals, determine the successful software development team structure. If you need to develop an MVP quickly and launch the product, go with the first option.
- A small team of generalists or full-stack developers is enough to work on a non-specialized product.
- A specialist team is a better choice to build a highly regulated or high-performance product.
- A hybrid approach that combines generalists for the core team and specialists for specific functions is better suited to most products at the scaling stage.
The role of a T-shaped team member, who has general knowledge of the software development process (horizontal) and a particular specialization (vertical), is becoming extremely popular as companies seek to balance the two aspects. T-shaped engineers can perform all available software development functions at a moderate level and have a solid understanding of one particular area, allowing them to lead in that area.
Step 3. Determine Team Size and Budget
Based on the project goals and the chosen development team structure, determine its size. There are three possible sizes in terms of product development:
The higher the product goals, the more people you will need to fulfill them. The team budget depends on the size and the experience level of your members. The higher the members' level, the more budget you will need to allocate for their hiring.
Another crucial decision to make is what hiring model you prefer: in-house vs outsourcing software development, or freelancing. The location of your team members also impacts the overall cost, with the rates varying significantly from one region to another.
Note that this is more of a market guideline than anything else, as the project cost depends on the scope, complexity, and requirements, which can only be determined via an individual discovery session.
Step 4. Define Roles and Responsibilities
With the development team size in mind, assign roles and responsibilities in accordance with the chosen structure. They are:
Depending on the team size, a product development team may combine some available roles. E.g., a CTO may fill in for a Tech Lead and a Product Owner role in a small crew.
Step 5. Hire the Right People
Define role-specific performance objectives instead of skill-based ones. E.g., «deliver the payments module to production» rather than «should know about payments». Set expectations for each new development team member in terms of 4–5 key performance areas and what they should be able to do within the first 6–12 months.
Finally, when building a software development project, assess the candidates’ technical and soft skills. Suppose someone becomes available right now, but their English skills are poor, and they have limited experience working with people. In that case, such a developer will require extra time and effort to train and manage. Remember that even the best engineer in the world is no good if they cannot explain what they do understand.
There are three main options for filling these roles, each with its own advantages and disadvantages, depending on your business needs.
- In-house hiring is the best option if you want to build long-term relationships with your engineers.
- Freelancing is better for short-term statements that require a specific set of skills for a limited period.
- A technology partner is a great option if you need to scale your operations rapidly or fill in roles that are either unstaffed or under-skilled at the moment.
Step 6. Set Up Communication and Workflow
A team’s performance depends mostly on two factors: the selected delivery framework and the right tooling. So, establish collaboration rules and communication methods that will facilitate interaction between the project members. It may include daily stand-up meetings to plan and discuss work details.
Create the infrastructure for communication and collaboration, such as Slack, Jira, or Confluence, or another set of tools, and ensure team members’ accessibility to it. The rules of communication should include escalation policies that stipulate who has the authority to make specific decisions. For distributed teams, communication rules should include time zones so all participants know when meetings can be scheduled. In addition, it is essential to establish a meeting schedule with a consistent cadence so that remote workers are not overwhelmed by coordination.
Step 7. Track Performance and Provide Feedback
Only the metrics that you want to improve should be measured and tracked. This information should be used to establish KPIs, such as:
- average cycle time;
- resolution time of production incidents;
- percentage of story points;
- code review coverage.
It is also essential to have a roadmap review cadence to assess whether the team is on track to meet project goals. Use both qualitative and quantitative data to understand what drives and constraints determine the team’s performance. Most importantly, emphasize that metrics are there to identify obstacles to help the team perform better rather than judge the employees.
Software Development Team Size and Cost
Team size and cost move together, and both scale with the product's ambition rather than the size of the company behind it. Here are the criteria for a successful software development team depending on the project type:
Cost increases in ranges as the project scales and the best way to understand it is in comparison — each level as a percentage of a base MVP. Take the 100% option that's normal for any SaaS MVP. When the product moves into the growth phase and needs a team of full-stack developers QA engineers, a product manager or owner, a designer and DevOps the cost already goes up by 200-400%.
Also the customized option will cost 500-700% more than the one. As usual an enterprise-grade build may be 400-1000% of the base option. Finally the complex solution that requires a team of developers to build and maintain is 800-1200% or more expensive than the one. As you can see each level is more expensive than the previous one since the complexity and needed resources grow quickly.
The Qualities of a Successful Software Development Team
Structure sets a team up; qualities are what enable it to deliver. A successful software development team comprises a set of traits that manifest as results rather than on paper.
Clear Goals and Accountability
A crew has clear project goals that outline the product’s requirements, the quality standards that the software produced must adhere to, and responsibilities that the team members have to take on to complete the task. The information enables the group to set its priorities and avoid spending time on useless activities that do not yield results. The quality aids in accurately predicting the result in a shorter period.
Unclear goals, on the other hand, lead to vague results and undermine the team’s ability to deliver.
Effective Communication
Effective communication is essential for a successful software development team. Regardless of the members’ qualifications, poor communication skills limit their potential and decrease the performance. Thus, it is necessary to attract competent people, facilitate the communication process, and ensure the effective use of their combined efforts. The team members should create a conducive working environment to maintain the productivity of the ongoing communications because their participation is vital for the software project’s success.
In particular cases, good communication enables remote workers to achieve greater efficiency, faster decision-making, error detection, and resolution. In addition, it is critical to conduct team building and encourage ongoing communications because of the increased risks of misunderstanding at a distance. Thus, communication breakdowns are inevitable when the work environment conditions are not conducive to ongoing interaction.
Cross-Functional Collaboration
The collaboration process within a cross-functional team can be a critical factor that enables the group to expedite decision-making. This is achieved because diverse development teams allow members to bring different perspectives to the table.
The team's capacity to recognize and resolve impediments before they become serious issues is enhanced by the group's cross-functional nature. That way, the team can minimize the number of iterations as different specialists would bring varied expertise to the table, shortening the feedback loop.
Domain Expertise
The team should possess domain expertise that enables it to make better business decisions while minimizing the number of the false starts in the project. For instance, a team with extensive domain experience in a particular industry subject to established regulatory requirements will avoid building non-compliant business logic in software systems. So, such professionals would reduce development costs by minimizing the number of changes required after the product's initial launch.
Proactivity and Independence
A productive software development team that works together can give feedback and fix problems quickly. So, people, who take responsibility and are ready to perfome, reduce the amount of work needed to manage and control the project. Conflict can be avoided by facilitating quick agreement on right-of-way, and giving clear alerts and signposts for roadblocks. Team members are willing to take up a task to fix a minor issue instead of being reminded by the manager. In the case of CTOs, it means lesser management overhead with more predictable deliveries.
Soft Skills
The team does not depend only on technical skills to meet project objectives. Members' social competence also plays an equally vital role. A teammate who has emotional intelligence can act in a way that allows other teammates to avoid working messily in most situations, such as when they disagree with one another. To sum up, one of the most important emotional intelligence benefits is that it helps people at work resolve issues and get the job done even when the going gets tough.
Ownership
A good team player can always rely upon to get the job done as requested. They work to ensure the project is done on time without everyone waiting too long. They don’t have to be watched all the time either. They know what to do, what the project aims to accomplish, and why their job is important to the project.
Team Size
The effectiveness and speed of a team can be greatly influenced by its size. The bigger a project team is, the more time it will spend communicating with one another. This bottleneck decreases efficiency as far as project results are concerned. While a team of 10 can do wonders, larger entities require more qualified leaders to give a similar output.
Management
The success of team software development depends on skilled technical leaders being at the helm. It is the duty of a technical leader to ensure the team has the appropriate competence and management skills to achieve the project objectives. A technical expert within the team allows the staff to focus on the task and deliver better results. Meanwhile, as an efficient manager, this person enables the team to expedite decision-making. It helps speed up project delivery.
Conclusion
Building an efficient software development team is a process of selecting the right talents with the corresponding competencies and communication styles. It is also about experience levels for delivering high-quality, reliable software that meets the company’s growth needs. The choice among in-house development, staff augmentation, and outsourcing determines how the product will be delivered and how good it will ultimately be.
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- integrate into your existing working environment;
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With more than 18 years of legacy and 35+ Fortune 1000 companies served, our experts establish the most relevant software engineering teams for your objectives, technology choices, and deadline expectations. Arrange a discovery call and share your software project requirements to find a fitting structure for your business.
FAQ
How do you build a good software development team?
A decent software development team is built by selecting optimal workers for a specific project according to their qualities, providing them with the required level of responsibility, and motivating their work with a convenient workflow for all of them.
Start with establishing the requirements for the expert team whose skills complement each other. Also create an ownership plan and a management system that helps the team work toward the same goal. Then ensure an efficient development process that allows team members to collaborate.
What is the ideal software development team size?
Depending on the product's complexity, time-to-market, and available resources, the team size may vary. Normally, building a software development team takes a team of 5-9 people, which is usually enough for the majority of products. More complex products require collaborative work of teams.
How much does it cost to build a software development team?
It depends on the way you work, how many people you need, and where your developers are located. Usually, having an in-house team is the more expensive choice because it takes a lot of time and money to find, train, and cover other costs. You can save resources by hiring help or using a staff augmentation approach.
What roles should a software development team include?
The main group usually has a project manager, software developers, QAs, and people who design the user interface and user experience. Other roles, such as business analysts, people who handle development operations,, and security checkers, are added based on the product's needs. At the same time, it is essential to cover all the necessary areas without bringing in superfluous functions.
Should you build an in-house team or outsource?
Outsourcing is usually the choice if you want to get your product out faster and make development go quicker. It also makes sense if you need developers' skills. Remember that in-house software development teams give you more control and help keep the value of your project over time.