Team Extension vs Dedicated Development Team: Key Difference

Blog Summary: As you plan to make your business reach the global marketplace, firstly you need to consider software development. Nowadays, businesses have taken it seriously, and as a result, IT outsourcing is the most favorite of all. Outsourcing has two conflicting models i.e., team extension vs dedicated development team. Making your success path straightforward, learn their key differences now. Don’t forget to miss the ending, it will reveal the tips to implement among dedicated teams and extended teams! 

The technology progression worldwide is showing astonishing data. It has boosted the demand for new technological trends and software developers. A recent forecast says, Global IT spending is anticipated to sum around $4.6 trillion in 2023. It is 5.5% higher than the 2022 spending. 

Businesses have indulged in the race to upscale their presence on digital platforms. Building applications and other types of software development is very common and prominent too. It majorly increases the need for IT resources to get the project done in less turnaround time and with higher functionality. 

It has also initiated the IT outsourcing mechanisms in the market. However, in the outsourcing aspect, a war between team extension vs. dedicated development teams. These are the top selected and reliable hiring models in IT outsourcing. To make the correct decision for your business project, read through the whole differential view in the article.    

Introduction to the Team Extension Model

For any sector, team extension is the model for integrating full-time professionals into your company. It is a scalable way to expand your existing team with new members through the recruiting process. Particularly, the software team extensions model is a hiring model to strengthen the capability of your organization. It adds value to your in-house software development team. 

The team extension initiates the hiring process by researching, evaluating, and interviewing the candidates. It requires extensive efforts and proper examination to select the right candidates and onboard them. Team extension is nothing but the general hiring process for the company. It depends more on the project-based requirements. 

Are Staff Augmentation and Team Extension the Same Thing? 

Many entrepreneurs misinterpret staff augmentation and team extension as similar. See, staff augmentation is about hiring a team of developers for a short duration and on a temporary basis. It limits to having the developers only for the project. 

Software development team extension is about enhancing the overall capacity and expertise of your IT organization. It eliminates the barriers to country boundaries. You can hire full-time remote teams from outsourcing companies across the globe. It will save you bucks on setting up the workplace with infrastructure and equipment.

The extended team works just like the existing professionals for your company either at the office premises or remotely. So, they abide by your company’s rules and regulations. The extended team will get remunerations monthly.

They need to follow the shift timings, leave policy, perks, etc. It establishes a corporate relationship between the company and candidates. So, the candidates who are on board as employees, also need to keep the company’s data secure and confidential.   

What are the Benefits & Limitations of the Extended Team Model? 

Firstly let’s look for the potential benefits of the team extension model.

• Enhance your business capabilities 
• Improve overall productivity
• Fill the skills gap
• Boost the business ROI 
• Speed up the workflow
• Highly flexible approach 

Now, looking into the disadvantageous section of this model.

• Ineffective communication
• Inappropriate management 
• Costly option for startup projects

You have learned about the extended team model inside out. It’s time to move to a dedicated model, as it is essential to gain insights into both of them. So, you can easily make an accurate decision from an extended team vs. a dedicated team for your business project. 

Introduction to the Dedicated Development Team Model 

The dedicated team model is the most popular and widely accepted these days. When you hire the whole development team for any project dedicatedly from an outsourcing company, it is termed a dedicated team model. Usually, it is a long-term agreement between the client (IT company) and the development service provider.

Consequently, the selected members of the team are dedicated to working exclusively on the client’s tasks just like the in-house ones. The major difference is that the payroll of the dedicated team is managed by the service provider company rather than the clients. It implies that the dedicated team is indirectly and ultimately working for clients only. 

In this model, the client is denoted as the company that lacks several technological skills. So, it prefers to outsource the team to furnish their overseas clients’ project needs. 

Putting it simply, the outsourcing company that deals with a range of clients hires a dedicated remote team from another IT company. It hires the development team after performing the whole hiring process for dedicated developers. Normally, the dedicated team is responsible for one or more clients’ projects of the outsourcing company. 

Accordingly, a dedicated team model opens more exposure to developers and clients. It will assist in building glorifying portfolios for developers and acknowledgment for its company. So, you can clearly say that it makes a win-win situation for both parties.

Related: How to Hire Dedicated Developers From India?

How Does the Dedicated Model Work?

Well, the dedicated model is sort of an effective solution for startups and large enterprises. As a startup has a low budget, it can hire developers instead of the whole team for its project. 

Whereas the large firm targets a wider scope to expand, it can simply hire a dedicated development team. The team consists of project managers, business analysts, developers, QA testers, and UI/UX designers. 

It offers two major cost models i.e., fixed cost and hourly rate. The fixed cost solution is the proficient method to discuss and negotiate the overall cost of the project. In the hourly rate pattern, the developers or service provider charges per-hour cost. It calculates the cost based on the time (hours) spent on each assigned task or development process. Furthermore, the majority of US-based clients consider to hire dedicated developers in India, due to its lower hourly rates.

The dedicated development model is a stress-free and streamlined method for clients. It allows them to rest assured about the project as every minute to major tasks are managed by the outsourced team.

What are the Benefits and Limitations of the Dedicated Model? 

Following are the reaping benefits of the dedicated team model.

• Opportunity to work with diversified experts
• Seamless development cycle
• Minimizes the hassle of clients
• Takes complete ownership
• Fits for cost reduction strategies
• Manages the professional relationship 
• Establish a transparent communication network    

Next up are the limitations to look for before hiring dedicated developers. 

• Not suitable for short-lived projects
• Encompass certain risk factors
• Full project control which may affect the project. Like, if the dedicated team has made the wrong decision, the loss is borne by the client or outsourcing company.

So, even if you choose the dedicated model, it’s essential to know how to manage a dedicated development team. 

Team Extension Vs Dedicated Development Team: Differences 

Since the beginning of software development outsourcing, team extension and dedicated teams have been prominent facets. Choosing between the dedicated team vs. extended team highly depends on a range of factors. Here is a quick outlook for you.

Complexity and Size of Project

Long-term and complex software development projects require the allocation of an entire team with a proficient understanding. As a result, a dedicated team is an ideal choice for such a parameter. The dedicated team is bound and committed to the assigned project till its successful completion. In this way, your project gets the attention of experts.

On the other hand, short-run projects that don’t need in-depth analysis are preferable and can go for a team extension. Eventually, it might not need the whole team to hire. You can recruit specialized developers who will merge with your existing team. Furthermore, it is beneficial to both your company and clients.

Industry-specific Needs

Nowadays, CEOs look for developers with industry-based portfolios. It makes them evaluate the past work and its success metrics to move further. So, the extended team option isn’t fulfilling the expectations. 

Having a dedicated development team with core and new technological skills can make the way. The team has strong communication and experience to manage the project lifecycle smoothly. 

For instance, if you want to build a taxi booking app, it demands to have recent updates about the market and customers. The dedicated team has business analysts, who perform deep market research and plan the business needs. So, a dedicated team is suitable to make the business gain a competitive edge in the industry verticals. 

Project Management

Managing the project lifecycle is a big responsibility. It requires to have proper control of the workflow and task allotment. An extended team is handled by the client at every step. While the dedicated team as mentioned above has the project manager. It undertakes the responsibility to have proper task assignments. 

Every member is liable to report to the project manager for any concerns or issues. So, the development process is fast and streamlined in a dedicated team model. But it doesn’t suggest that clients shouldn’t give any attention to their activities. It is important to know how to managing development team to prevent any issues. All-in-all, it makes the dedicated model better than the team extension.

Budget-Friendly

For any project budget is the primary aspect that can either make or break your dream software development project. The clash between team extension vs. dedicated development team is predominantly decided due to the cost factor. It’s evident that businesses may neglect each of the above factors but the cost element is non-negligible. To make the process easygoing, finance is at the center. 

In this matter, both models can fit your budget depending on the duration of the project. The projects with longer development spans should emphasize how to hire dedicated developers. On the contrary, projects with less complication and lasting for a short timeline should choose a team extension solution. 

Dedicated Development Team vs. Extended Team: When do you need which type of model? 

Although the factors are indeed good assistance in determining the right one. But beyond that many CEOs feel like considering the dedicated team vs extended team has key differences based on the situation. So, here we have elaborated the choice as per different scenarios of business. 

Startup Businesses

Startups are initiating to enter the market with a tight budget. So, whenever it comes to budget constraints, the dedicated development team model is no less than a savior choice. It will eliminate even the hiring process which is not possible for a lengthy team extension process. 

You just need to oversee the portfolio and reviews on the respective talent marketplaces. For startups, a dedicated hiring model makes the way smooth and hassle-free. However, it is advisable to choose IT outsourcing from India. As the USA and European countries have heightened rates. So, startups should search for India-origin companies and hire from them. It will save you time and money to a greater extent.

Urgent Requirement for Resources

The company goes for team extensions whenever they feel or have urgent requirements. For example, many professionals left the organization in less time. It becomes problematic for the company to manage the existing projects. So, it anyways becomes essential to hire an extended team of developers. 

A dedicated team doesn’t fit this circumstance. It is the in-house and full-time workers needed to serve the general needs of any organization. Therefore, for urgent needs team extension is a winner in the fight dedicated development team vs. extended team.  

Lack of in-house Skills and Expertise

There have been times when you get a client with the technology and skill necessity that you don’t have. It brings both models into consideration though. However, the dedicated model has been proven as the most effective. You can undertake it with two scenarios;

• The skills and expertise are costly or do not fall into your company’s main services. So, it is profitable to outsource the dedicated development team.

• Secondly, even if you hire an extended team, the responsibilities of the team will exist only till the project. As soon as the project closes, you won’t need the whole team. Hence, it will lead to unnecessary laying off which puts a negative impression on your company.

Moreover, if you want to expand your team to new technologies for future demands, then only the extended model is favorable. Therefore, make wise decisions considering the present and future simultaneously.

Need to Expand the Company’s Size

This situation is a better fit for mid-sized companies that have been in the market for many years. With changing dynamism, the company is planning to explore new technology trends. In that case, it is good to hire new professionals and expand your team. You should also begin with marketing strategies. It will be beneficial to grab the client’s attention and lock the long-term projects.

Short-term Projects

The short-duration projects may not need a full-fledged team. Companies with existing teams and extended developers can manage the process. Hiring remote workers shall be the appropriate choice to achieve their goals. As a result, it will reduce the development cost. 

Unclear Idea of a Project

Many times, newbie CEOs have raw ideas without any support and blurred targets. For them, the dedicated model is the ultimate solution. Because the process will start with clarity of ideas. So, your project will be backed by professionals from the initial stages. Consequently, it will prevent waste of time and money. 

With that, both models have been an essential part of IT outsourcing. Choosing the right one requires you to figure out the aforementioned situations or parameters. As you proceed, you should also consider some of the ways to make your chosen model fruitful. 

Read More: Different Types of Software Development

7 Ways to Make Your Selected Outsourcing Model Successful 

In the battle of the dedicated team vs. extended team’s key differences, you should pick strategically. Yet, it is important to make your decision worthwhile. So, here are some tips to do so. 

• Portray our business objectives crystal clear
• Examine the skills and experience of the team
• Establish proper communication among the departments
• Undertake the time zones of the remote team
• Track and monitor task assignments and completion daily
• Assign tasks with appropriate deadlines
• Give opportunities to upskill with new technologies

Move Forward with the Right Team Model! 

No matter what hiring model you go for, remember that it’s the people who make a difference. So, you have to work impeccably on the interview rounds. It is advisable to be double-sure of your choice. Because the desired goal can be achieved with ideal workers who incorporate both technical and soft skills. These skills combination will deliver 60% faster results. You can get in touch with 13+ years of experience and an innovative offshore development company.