Your Ultimate Guide to Dedicated Team vs. Extended Team

Software development projects come in all shapes and sizes, and so do the teams that work on them. Some teams are made up entirely of in-house staff, while others might be completely outsourced, or a mix of both.

The IT outsourcing industry is experiencing remarkable growth, with projections indicating a robust 10.99% increase in the coming years. According to Statista, the sector is on track to reach an impressive $512.50 billion in revenue by 2024. Even more striking, it's expected to surge to $777.70 billion by 2028.

These figures paint an optimistic picture for IT outsourcing companies. The substantial growth forecast suggests a wealth of opportunities on the horizon, with a steady influx of potential clients seeking their services.

Typically, software projects begin with an in-house team. However, there are times when a company needs to bring in external expertise for specialized projects. For instance, a company primarily focused on developing mobile apps might require a different team to create enterprise-level software. Additionally, when multiple projects demand specialized skills that the current team lacks, seeking external support becomes essential. In these cases, it's common to add experts from outside the company who have the right experience, like someone who knows a lot about financial services to help create a banking app. Software outsourcing companies are really helpful for finding these experts quickly.

In this blog, we'll look at how companies use outsourced teams: a dedicated development team that focuses only on one project, and an extended team that adds more people to an existing group. If you're new to hiring outsourced teams, it might be confusing to know when and how to use these models. We've put together this guide to help team leaders understand the options and make the best choices for their projects.

What is a Dedicated Development Team Model?

The Dedicated Development Team Model is a way to hire a team of developers from another company to work only on your projects. This team works like an extension of your own team, helping you with skills, technology and expertise you might not have in-house. It's great for long-term projects and allows you to manage and control the team directly. This model helps you save money, improve productivity, and get high-quality software done on time. 

Hiring a dedicated development team is similar to renting a skilled workforce. You can select professionals from a global talent pool based on your project’s specific needs, complexity, deadlines, and budget. This model offers great flexibility, allowing you to scale the team up or down as needed.

This approach is especially useful for managing complex and large-scale tasks such as:

• Developing mobile apps, including Minimum Viable Products (MVPs).
• Creating software products like accounting systems, project management tools, and HR management systems.
• Building cloud-based solutions, such as Software as a Service (SaaS) and Infrastructure as a Service (IaaS) platforms.

How Does the Dedicated Team Model Work?

The dedicated team model involves a structured and collaborative approach between a client (demand side) and a service provider (supply side). Here’s how it works:

Requirement Analysis

Client's Role The client outlines their project requirements, desired outcomes, the number of team members needed, and specific skill sets required.

Service Provider's Role The service provider reviews these requirements and begins the process of selecting suitable candidates who match the project's needs.

Team Selection

The service provider sources and recruits the appropriate team members, ensuring they meet the qualifications and role descriptions provided by the client.

Workload Agreement and Onboarding

Joint Effort Both the client and the service provider agree on the workload, project scope, and collaboration framework.

Onboarding The team is introduced to the client’s business processes, tools, and workflows. 

Project Management and Execution

Client's Role The client takes over the management aspect, incorporating the dedicated team into their software development life cycle (SDLC). They handle daily task allocation, project leadership, and oversight.

Service Provider's Role The provider may assist with operational alignment, setting up team infrastructure, and optimizing development processes. They also commit to ongoing talent management, including sourcing replacements if necessary and ensuring team performance.

Focus and Collaboration

The dedicated team works exclusively on the client's project, ensuring focused effort and high-quality results. The client maintains control over the project, providing direction and feedback as needed.

Continuous Support and Optimization

The service provider supports the client with Agile project management practices and effective CI/CD processes, aiming for faster and more efficient software engineering.

This model creates a strategic partnership where both parties share responsibilities, ensuring the project’s success through collaboration, dedicated effort, and continuous improvement.

Benefits of a Dedicated Development Team Model

Flexibility

A dedicated team allows you to adjust to new project needs. You can hire a dedicated development team with specific skills when you need them, without being stuck with a permanent in-house team that may not always be needed.

Quick to Set Up

You can put together a dedicated development team faster than hiring a regular, in-house team. Software companies usually have a group of skilled people ready to start working, which means you can have a dedicated team ready in just a few days for your long term project's success.

Ready to Go Skills

A dedicated development team is already trained and comes with the skills you need. This saves you the time and effort of training them, especially for specialized tasks.

Cost Saving

Hiring a dedicated team can be less expensive, especially if you look globally. For example, developers in North America might charge a lot per hour, but you can hire quality dedicated developers in India who charge much less.

Challenges of Implementing a Dedicated Team

Communication Issues 

Working with a team from a different company can lead to communication problems. They might have different ways of updating you or might not speak your language well, which can make working together harder.

Security Risks 

When you bring in an outside team, there's a risk that your project information could be leaked or stolen. Even though companies try to keep data safe, no system is perfect.

Takes Time to Get Started

A dedicated team might know their stuff, but they need time to learn about your specific project and how your company does things. This setup time can be a disadvantage for short, urgent projects.

Related Reading: Dedicated Developers vs. Freelancers

What is an Extended Team?

An extended team is a collaboration model where additional team members from another company are integrated into your existing in-house team to enhance capabilities and fill skill gaps. Unlike project-based outsourcing, the extended team model fosters ongoing cooperation, ensuring that the collaboration continues beyond the completion of individual projects.

1. Augmentation, Not Replacement The extended team complements your in-house staff rather than replacing them. This means that key competencies, both business and technical, remain within your core team, while the extended team operates offshore to provide specialized skills.
2. Continuous Collaboration The cooperation between the in-house team and the extended team is ongoing. This model supports long-term business objectives and core operations, rather than being limited to specific projects.
3. Control and Communication You retain complete control over the project. The extended team works closely with your in-house team, ensuring constant and direct communication. This integration helps both teams function as a cohesive unit.
4. Shared Responsibilities Responsibilities are evenly distributed among all team members, whether they are in-house or offshore. Every member is equally invested in the project’s success, contributing to building the product and sharing accountability for its outcomes.

For example, you are building an application for your company and have an in-house tech team skilled in .NET and flutter development. However, you found that there is a need for a React developer. Instead of hiring a new full-time React developer as it can be expensive, you opt to extend your team by hiring offshore React developers. These developers integrate with your existing team, working collaboratively to achieve project goals. This model provides the flexibility to adapt to changing project needs while ensuring that the quality and productivity of the team are upheld.

How to Make Extended Team Model Work?

Setting up an extended team can really boost your project's capabilities. Here's how to do it effectively:

Planning Start by figuring out what your project needs. Look at your current team and see what skills you're missing. It's often helpful to get advice from consultants who specialize in providing extended team hiring models. They can look at your project and team, and help you plan how to fill in the gaps.

Finding the Right People Once you know what you need, it's time to find the right people. Work with your vendor to screen candidates. Make sure they have both the technical skills and the personality to fit well with your team. It's a good idea to be involved in this process yourself, so you can make sure you're getting people who'll work well on your specific project.

Getting the Team Started After you've chosen your new team members, you need to get them up to speed. Introduce them to your in-house team and show them how you do things. Many vendors will provide a project manager to help smooth this process. Make sure everyone knows their role and understands how the project works.

Adjusting Team Size One of the great things about an extended team is that you can change its size as needed. If you need to hire developers at bulk, you can add them. If you need fewer, you can scale back. Your vendor should be able to help with this, providing the right people and tech support as your needs change.

By following these steps, you can create an extended team that works well with your in-house staff and helps your project succeed. It's all about careful planning, choosing the right people, and making sure everyone works well together.

Benefits of the Extended Team Approach

Filling Skill Gaps

If your current team is missing some skills, an extended team lets you bring in experts just where you need them, without having to hire them full-time.

Easier Hiring

With an extended team, you don't have to go through the long process of posting job ads, interviewing, and hiring. This saves your HR team a lot of time and lets them focus on more important tasks.

Flexible Hiring

You can add just one or a few specialists to your team at a time. This is great for when you need just a little more help or a few special skills.

Quick Results

Extended team members are usually ready to jump in fast because they are already trained and know what they're doing. They help your long term projects move faster and produce better results.

Challenges of the Extended Team Model

Communication Issues

It might take some time for new team members to get used to how your team communicates. They need to learn about your meetings, updates, and the tools you use for talking to each other.

Collaboration Takes Time

It takes time for new and existing team members to get used to each other and work well together. Trust has to be built before everyone can collaborate closely.

More Management Needed

At the start, you might need to manage the team more to help everyone work together smoothly. Managers have to make sure that both new and current team members can work as one team.

Differences Between Dedicated Teams and Extended Teams

Control and Management

• Dedicated Teams The client has complete control and handles direct management, making sure everything follows the plan during the software development process.
• Extended Teams The management is split, allowing the extended team to work well with the existing team, using the same tools and following the same rules.

Cost-Effectiveness

• Dedicated Team Model Great for long-term projects because it offers stability and dedicated resources, helping to keep costs predictable and often lower over time.
• Extended Team Models Better for short-term projects or when a project needs to change often because it lets you adjust the size and cost of the team more flexibly.

Flexibility

• Dedicated Development Team Less flexible as they focus on just one project at a time, which might limit quick changes if new needs arise.
• Extended Development Team Very flexible, able to adjust quickly by changing team sizes or adding specific skills needed for the project.

Scalability

• Dedicated Software Development Team Can grow or shrink but usually within the scope of the specific project, adding new team members if needed.
• Extended Software Development Team Extremely scalable, able to add or reduce tech talent quickly based on the current project needs without long commitments.

Skill Access

• Dedicated Development Team Model Starts with a wide range of technical expertise, ready to handle all parts of the project from the beginning.
• Extended Development Team Model Can quickly bring in people with the specialized skills needed to fill any skill sets in the existing team.

Integration

• Dedicated Teams Needs a detailed setup of the company-specific tools and processes, making sure they match the in-house team’s methods.
• Extended Teams Also needs integration but focuses more on fitting well with the existing team and using the same project management tools.

Security

• Dedicated Development Teams Usually offer better security because they follow the company’s strict rules under the close watch of the project manager.
• Extended Development Teams Security might vary based on the outsourcing company, but they work under the supervision of project managers to keep things safe.

Cost Structure

• Dedicated Team Model Might be more costly due to full-time commitments and needing lots of technical skills, but they bring a lot of value to large and complex projects.
• Extended Team Model More budget-friendly for temporary needs, perfect when you need extra technical skills for certain parts of a project without long-term costs.

Project Suitability

• Dedicated Team vs Extended Team Dedicated teams are best for large, complex projects that need steady attention and resources. Extended teams are good for adding extra help or specialized skills temporarily.

Management Overhead

• Dedicated Development Teams Require more effort to manage because they are like a new part of the company that needs fitting into the overall development process.
• Extended Development Teams Easier to manage since they are designed to blend into existing setups, needing less oversight from project managers.

Communication

• Dedicated Team vs Extended Team Dedicated teams ensure direct communication, closely following the in-house development team’s ways. Extended teams may face more challenges, needing to coordinate with both the core team and extended team members to keep the project on track.

Read More: IT Staff Augmentation vs. Managed Services

Which Outsourcing Model is the Best for Your Project Requirements

You may have some idea about when your company will need a dedicated team vs. extended team model. However, to make it more clear, here are a few points to consider when choosing one of these models.

When to Hire a Dedicated Team?

Long-term, Scalable Projects

If your in-house team is already engaged but your project demands long-term, continuous, and scalable efforts, a dedicated team can provide the necessary focus and resources. This approach ensures your project's sustained progress without overwhelming your internal team.

Full Control and Dedicated Focus

When you need full control over your project, including the selection, management, and motivation of team members, a dedicated team is ideal. This model allows for a team fully focused on your project, aligning perfectly with your specific goals and requirements.

Startups and Resource Optimization

For startups, a dedicated team is a practical solution to avoid the extensive time, resources, and expertise required to hire, train, and manage an in-house team. This allows startups to concentrate on core business activities while benefiting from a skilled and experienced development team.

Expertise for Complex Projects

If your project involves complex, mission-critical tasks requiring advanced skills and extensive experience, a dedicated team can provide the necessary expertise. This ensures that high-stakes projects are handled by professionals with in-depth knowledge and a proven track record.

Cost Optimization with a Higher Budget

When you have a higher budget and aim to optimize costs by outsourcing the entire development process, a dedicated team can be a strategic choice. This model helps reduce overhead costs while maintaining high-quality development standards.

Flexible for Various Business Sizes

A dedicated team is suitable for startups, small businesses, and enterprises looking to scale their development capabilities without the overhead of an in-house team. This flexibility allows businesses to expand their operations efficiently and effectively.

Hiring a dedicated team ensures that your project receives focused attention, expertise, and the resources needed for successful outcomes, optimizing your development processes and achieving your business goals.

When to Hire an Extended Team?

Augmenting In-House Capabilities

If your in-house team lacks specific skills needed for a project, an extended team can fill these gaps, ensuring that your project has the expertise required.

Adding Niche Expertise

When your project demands specialized knowledge in certain programming languages, frameworks, or technologies, bringing in experts through an extended team can provide the necessary skills for a short-term or specialized project.

Accelerating Development

If you face an aggressive deadline, an extended team allows you to speed up development by leveraging a larger pool of resources, ensuring timely project completion.

Optimizing Costs

For projects with budget constraints, extending your team offshore can help reduce costs. By hiring talent in regions with lower labor costs, you can maintain quality while staying within budget.

Scaling for Specific Projects

Enterprises with established in-house teams can use extended teams to scale up for specific projects. This approach enables you to add specialized skills without disrupting existing processes, allowing for efficient and seamless project execution.

Practical Scenarios: Dedicated Team vs. Extended Teams for Project Excellence

Scenario 1: Hiring an Extended Development Team

• Project Description Imagine being amid developing a larger product, like launching a Minimum Viable Product (MVP), with an aggressive deadline. Your in-house team is talented but stretched thin, necessitating additional team members to accelerate development and ensure a timely launch.
• Model Choice In this scenario, opting for an extended development team model is ideal. By integrating a specialized extended team into your existing project, you gain rapid access to resources that complement your core team, enabling you to meet tight deadlines efficiently and launch the MVP on schedule.

Scenario 2: Hiring a Dedicated Development Team

• Project Description As a startup founder with a groundbreaking idea but a limited budget, you aim to develop a prototype to showcase to potential investors and stakeholders.
• Model Choice In this case, selecting a dedicated team model is the perfect solution. Partnering with a dedicated team service provider allows you to access a team overseeing end-to-end engagement, from product discovery to launch, efficiently and professionally. A dedicated team model minimizes overhead costs while ensuring the development of your startup's prototype is handled expertly.

Wrapping Up

Today, outsourcing software developers are becoming an ideal option for companies looking to achieve their business goals faster. However, the decision to go for an extended team or dedicated development team makes all the difference.

You understand your business and its needs the best. So, thoroughly analyze your project needs before making any decision. If you are in search of a software development company that can offer a variety of outsourcing models as per your needs, Prioxis can be the answer.

At Prioxis, we have a team of experienced developers who have delivered hundreds of projects with a 99% success rate. Whether you want to extend your in-house team or need an entire team dedicated towards your project we can help.