Here, testers are organized by line of business or products. Having testers assigned to specific products enables them to develop subject matter expertise to a level that is not usually possible when operating in a centralized test team. Test coverage and effectiveness of testing is enhanced since testers have greater knowledge of the product and use that knowledge to test wider & more complex scenarios. The interaction between development and testing tends to be better. Both groups mostly work together closely and interact often through-out the product life cycle. Processes for engagement and interaction between functional groups is pretty well set and happen more smoothly than a centralized model.
Testers normally report into the development organization or application owner. Testers, though considered peers with development at a product / project level, are often viewed as part of the development engineering team at a higher level.
Resource constraints can more easily affect test teams in such a model, since there is'nt a pool from which resources may be drawn when needed. Managing resources through the demand highs and lows can be challenging. Also, processes, tools and techniques followed tend to be local to individual test teams, with little consistency across product groups. Some element of redundancy exists, while issues could crop up when trying to integrate different products. Generally owing to the smaller size of de-centralized teams, the opportunities to specialize may also be fewer.
Having looked at both the centralized and de-centralized approaches, organizations may choose to follow either of these or even a mixed approach by centralizing some areas that can benefit from a central group while de-centralizing areas that would work best by being part of the product group. Irrespective of the approach taken, the testing team needs to be allowed to function as independently as possible, be responsible for important decisions affecting testing and receive sufficient senior management support.