Demands from different types of companies have driven the need to adopt more sophisticated organizational structures, aiming to optimize mainly the velocity (throughput), quality (quality assurance), and predictability (lead time) of the software development cycle.
Among the vast literature of frameworks and buzzwords, here are the six most popular team organization models in the market:
Types of Development Teams
1. Squads
The Squad model (originated and popularized by Spotify) represents the archetype of a multidisciplinary, autonomous, and product-oriented development team. Its main characteristic is end-to-end ownership of a specific business domain or functionality, ensuring the complete cycle of discovery, development, deployment, and operation.
- Composition: T-shaped structure, encompassing Software Engineers, QA, UX/UI, Product Owner (PO), and often specialists in Data Analytics or SRE.
- Work Mechanism: operates under agile methodologies (Scrum or Kanban), maintaining a continuous Backlog and a clear vision of the Product Life Cycle (PLC).
- Strategic Focus: prioritizes the generation of measurable Business Value and Consistent Product Evolution.
- Ideal Application: structures that require a well-defined long-term Roadmap, high adherence to Product Culture, and team stability for the accumulation of tacit knowledge.
2. Pods
In contrast to the strategic nature of the Squad, the Pod is configured as a lean cell of tactical execution. It is characterized by being a smaller, highly specialized team with a restricted focus on rapid problem resolution or elimination of technical bottlenecks with high-velocity execution.
- Composition: typically 2 to 5 high-seniority professionals or those with unique technical skills.
- Duration and Scope: can be temporary (project-oriented) or recurring (allocated to a critical or cross-functional front).
- Key Uses: addressing high-impact Tech Debt, creating proofs-of-concept (PoCs), refactoring legacy systems, or accelerating highly complex technical integrations.
- Ideal Application: scenarios with demand spikes, need for specific expertise to resolve bottlenecks, and optimize time-to-market in well-defined scopes.
3. Stream-Aligned Teams
Derived from the Team Topologies methodology, the Stream-Aligned Team represents the structural evolution of Squads in medium to large-scale organizations. Its main objective is to maximize workflow (flow) and minimize the Cognitive Load of teams, aligning them directly to a complete Business Value Stream, from customer to delivery.
- Structure: the team has Code Ownership and full responsibility for a domain that constitutes an end-to-end customer journey.
- Primary Benefit: drastic reduction of Inter-Team Dependencies (Handoffs) and elimination of functional silos.
- Examples: “Payments and Billing Stream,” “User Onboarding Journey,” “Post-Sales Experience.”
- Ideal Application: organizations seeking structural scalability (scaling with speed) and needing greater delivery predictability, controlling lead time from start to finish of the flow.
4. Platform Teams
As the organization adopts multiple Squads and Stream-Aligned Teams, the critical need for a Solid Development Platform emerges. Platform Teams are responsible for providing internal services and tools that increase the Autonomy and Velocity of delivery teams.
- Main Function: Treat the platform as a product (Platform-as-a-Product), offering Self-Service tools such as frameworks, SDKs, libraries, and infrastructure automation.
- Focus Areas: CI/CD (Continuous Integration/Continuous Delivery), Observability (Monitoring and Logging), Infrastructure Management (IaaS/PaaS), and Security by Design.
- Key Benefits: Promote Technical Standardization, reduce duplication of efforts (rework), and ensure Governance and Technical Quality at scale.
- Ideal Application: Environments with multiple technical dependencies between product and operations teams that require scale and a high level of DevOps Maturity.
5. Feature Teams
The Feature Team is a highly flexible and temporary resource allocation model, with the specific mission of delivering a new feature, system, or delivery wave within a restricted time horizon.
- Nature: Teams assembled and dissolved quickly (project-based), bringing together specialists from various areas to cover the scope of a specific delivery.
- Mission: Focus on rapid and objective delivery of a predefined scope (e.g., “Launch of Partners API V2.0,” “Implementation of New Anti-Fraud Module”).
- Advantage: Allows Tactical Allocation of Reinforcement for very short-term objectives, without compromising the stability of continuous product teams (Squads/Stream-Aligned).
- Ideal Application: Companies with a project-based model or that work with wave releases, requiring a burst of delivery capacity.
6. Business Units / Product Units
Units represent the highest layer of strategic organization, responsible for defining the Ownership and governance of the product and services portfolio. They act as the link between Corporate Strategy and Tactical Execution.
- Business Units (BUs): Organization structured by Business Areas (e.g., Credit BU, Logistics BU, Insurance BU).
- Product Units (PUs): Organization by Major Digital Products (e.g., Mobile App PU, Core Banking PU, ERP Platform PU).
- Purpose: Ensure Strategic Alignment (Strategy-to-Execution), define clear Business KPIs, and promote 360 Prioritization of investments.
- Ideal Application: Large-scale organizations (Enterprise Level) that need clear structuring of responsibility (Ownership), Governance, and a holistic view (corporate view) for optimized resource distribution (Squads and Pods).
How NextAge Helps Your Company Find the Ideal Model
Choosing the right organizational model is not just about adopting the most modern structure, but rather finding the design that best aligns with your objectives, technical maturity, and business context.
At NextAge, our expertise in IT team allocation, system support, and referential scope projects allows us not only to provide qualified professionals but also to assist in the evolution of your development teams.
Get in touch and discover how we can drive your business’s digital transformation.
