Companies often refer to outsourcing in order to deal with business challenges, such as skill gaps, costly development, and maintenance burden. According to the Deloitte 2021 Global Shared Services and Outsourcing Survey, 88% of companies decide to outsource to perceive cost reduction, 78% – standardization and process efficiency, and 63% – business value. 


Outsourcing, in general, does not solve all of these problems simultaneously. It comes with several service models that have necessary capacity to address different needs. The two most popular outsourcing models – a dedicated team and team extension – vary in problems they solve, resources they draw, the nature of cooperation, and price. 


Yet, a decision about whether to go with a dedicated team or to hire some developers from your outsourcing vendor’s side should not be made solely based on the cheapest paycheck. Your service model should be in line with your needs. Otherwise, you run the risk of paying twice: first, for the option you thought was the right one for you and then for the one that actually was. 


This is why we are going to discuss today the differences between a dedicated team and a team extension outsourcing model and how to choose the one that works best for you!



What is the Team Extension Model?

Team extension is an outsourcing service model in which your in-house team is enlarged by specialists hired from your outsourcing provider. Assume that you need just two QA engineers with expertise in automation. And let’s say you can’t find them in your city – either they don’t have the relevant experience or their salary is beyond your budget. Using the team extension model, you can hire these QA engineers no matter where they are located and for a price you are comfortable with.


You will be able to acquire missing skills and expertise from the best engineers while simultaneously maintaining your core competencies and core team. Vendors will invoice you for only the time developers spent working and the materials they used to do so.


Also, you will be able to save costs on the administrative support of your newly hired staff. Your outsourcing vendor will provide your extended team with:


  • – Office space (along with all utility services)
  • – Laptop and other equipment 
  • – HR activities
  • – Recruitment 
  • – Legal and accounting support
  • – People retention and motivation
  • – Conflict resolution
  • – Training and career development 
  • – Team building activities 
  • – Perks and benefits


However, there will be other responsibilities that will be on your side – and they are even more significant ones and are even more relevant to the project’s success:


  • – Project and team management
  • – Task assignment and distribution
  • – Onboarding 
  • – Performance monitoring 
  • – Knowledge sharing
  • – Deadlines monitoring 
  • – Code reviews 
  • – Requirements explaining


Using the team extension model, you will have complete control over the whole development process. Your vendor will only support your specialists administratively to ensure they feel comfortable working for you


Pros and Cons of Team Extension

Engineers from your outsourcing partner will work full-time or part-time as part of your core team – managed by you (or your project managers) but working from your vendor’s premises. Such a service model has its ups and downs you need to consider when choosing it. 


Advantages of Team Extension Model:

  • – Full control over your development team and resources
  • – Great flexibility, as you can hire more specialists from your outsourcing partner or any other vendor
  • – Easier bridging of skill gap and access to the worldwide talent pool
  • – No need to administratively support new members
  • – No need for additional physical space in your office

Disadvantages of Team Extension Model:

  • – Development and domain experience from your side required
  • – Management resources required from your side 
  • – Harder to integrate your extended team with your corporate values since they are not physically present in your office
  • – Language barrier & Hour differences

What is the Dedicated Team Model?

The dedicated team is an outsourcing service model that entails not just hiring specialists with specific experience but the whole team as a closely-working unit. Each team member will have the same complex task for your project – for instance, the development of a new feature, legacy modernization, maintenance, you name it!


But they will address these tasks each from their point of expertise (e.g., the feature needs to be designed, developed, and tested). Basically, you hire a +1 team to work not as a part of but in parallel with your in-house or other outsourcing teams. That’s why the dedicated team model entails hiring not only developers but also QA engineers, business analysts, project managers, and designers. Basically, the model can look like that:

A dedicated team entails more responsibility from your vendor’s side than team extension. It includes all responsibilities from the extended team model and adds on:

  • – Team management
  • – Code reviews
  • – Performance monitoring 
  • – Task assignment and deadlines monitoring 


You, as a client, will still have responsibilities but fewer and more fundamental ones:

  • – Knowledge sharing
  • – Team onboarding
  • – Project management (large tasks distributed amongst teams)
  • – Team management (partly)
  • – Requirements explaining


As a part of the dedicated team model, you delegate more responsibilities to your vendor and can focus more on business-specific aims and objectives.


Pros and Cons of Dedicated Team

Specialists hired as a part dedicated team model will work together as a fully-operating unit. They address the same general challenge, but each from the perspective of their own expertise. Generally, this service model is more universal since it does not require as much technical and managerial dependency on your side. However, it still has its ups and downs:


Advantages of Dedicated Team Model:

  • – Less managerial and technical resources are required from your side
  • – Better autonomy of your outsourced team
  • – More time for you to focus on business-related tasks
  • – Less team dependency on your input
  • – Shared responsibility
  • – Less influence of language barrier and hour difference since the whole team works together from your vendor’s premises
  • – 100% team engagement

Disadvantages of Dedicated Team Model:

  • – Less control over day-to-day tasks 
  • – Longer time required to hire all team members
  • – Only fits long-term projects
  • – Higher costs than with an extended team


A dedicated team reduces your responsibility for the part of the project you delegate to the outsourcing team. It gives you more time to address other non-technical objectives. However, you will have to build more trust with your vendor in order for this model to work. You will need to provide your dedicated team with all relevant knowledge so that they can work on your project. That’s why it is essential to foster a partnership with your vendor. This way, you will enjoy the benefits of a dedicated team model and reduce disadvantages since there is trust between you and your vendor.


Team Extension or Dedicated Team: How to Choose?

To choose the service model that works best for you, answer yes or no questions. 


  1. Do you have project managers on your side?
  2. Do you have at least some technical expertise you require to outsource? 
  3. Is your in-house team flexible and remote-adapted? 
  4. Do you need just several people with missing expertise?
  5. Do you have time or organizational resources for day-to-day performance and task monitoring?

If you answered yes to all of these questions, an extended team might fit your project. 


  1. Do you need to delegate the whole part of the project?
  2. Do you miss the entire scope of expertise you require to outsource?
  3. Are you ready to trust your project/part of the project entirely to an outsourced team?
  4. Do you need missing expertise, regardless of the number of people?
  5. Do you lack the time or people for day-to-day performance and task monitoring?

If you answered yes to the above bulk of questions, a dedicated team could be the right fit.


Of course, the choice is not carved in stone. Your project changes – it grows, extends, reduces, or transforms. You can always go from one service model to another, and:

  • – scale extended team to become a dedicated one, or
  • – reduce dedicated team and leave several people to add to your in-house one


What matters is asking your vendor for transparency and responsibility so that you get all benefits from the service models of your choice – not less. Do you want to talk about your project and see what we can offer you? Contact us!