December 10, 2021
Kaloyan Peltekov

Team Extension Model (TEM) vs Dedicated Development Team (DDT)

Blending technology with business has a great significance for competitive companies that rely heavily on software or are technology-driven. When hiring developers, they’re looking for IT professionals who can demonstrate a proven record of developing meaningful outcomes for enterprise clients. Unfortunately, hunting for experienced software engineers to scale your product is challenging.

The final cost of hiring a new developer equals a few months of their salary; that’s why outsourcing IT seems like a gateway to success on the roadmap to technological advances. BUT lower costs are not, at least should not be, the only reason to cooperate with external teams.

Successful outsourcing is most of all about the quality of output you get.

Business demands an integrated and strategic level of outsourcing that ensures a wide choice of experts together with an innovative approach to developing software. As your CTO needs to speak business and IT vocabulary, a good development team will suggest the right technology stack and communicate in your business language. When choosing the right offshore software development company, this is the “make it or break it” argument.

When you’re planning on working together with an external software development team, you should integrate them with your internal team (IT and business team) in a meaningful way. There are two basic models that you can follow here:

  1. Team Extension Model (TEM) — here, you’re going to augment the in-house IT team with developers that will complement the skill gaps in your staff.
  2. Dedicated Development Team (DDT) — here, you entrust the outsourcing company with the whole project, and a dedicated team will be a separate entity with its management and frameworks.

To accelerate digital transformation and derive more excellent value when outsourcing IT, you should be aware of the differences that each collaboration model brings to the table.

Let’s look at them and later find out how to take your project from the start to successful delivery.

Models of collaboration in outsourcing software

I should mention that you benefit from a worldwide talent pool in both models, not limiting your choice to specialists in your region. You have immediate access to some of the best information technology professionals that you can pick.

Team Extension Model (TEM)

This model is all about adding a missing skillset to your existing internal team while keeping strategic competencies entirely in-house.

Advantages of TEM:

  • You have greater control over the project while maintaining direct communication within the team.
  • You can distribute responsibilities among all team members, both in-house and offshore.
  • Your strategic competencies stay in-house.
  • Your focus is on speed and effectiveness to build the right team faster.

Dedicated Development Team (DDT)

This model describes a collaboration with external developers team that works full time for your project. It is a good solution if you have difficulty attracting good developers. Additionally, it frees up your time completely to focus on the company’s core competencies and business side.

Advantages of DDT:

  • Your mind is set on business only; the hired team is fully responsible for gathering the right specialists, managing the project, quality control and delivery.
  • You focus on acquiring a reliable partner to deliver good quality software to conduct large-scale projects.
  • You enhance your business productivity while development is delegated to outsourced professionals.
  • Your tech partner takes care of keeping developers satisfied in a very competitive employees’ market and motivates them to expand their knowledge and substitute team members if needed.
  • You can streamline the workflow if you decide to include the DevOps role in the project.

How to make it from the start to a successful delivery?

Regardless of the cooperation model you choose, people tend to come together when they feel that a greater good can come out of the cooperation.

Every new project we start working on at SoftwareMill has significance in terms of business development and requires close cooperation with the client. Successful outsourcing is all about partnership and after selecting a tech partner, there are a few steps to follow to ensure a successful delivery:

  1. Investigate and discuss business and technology challenges to form a project strategy.
  2. Agree on toolset and frameworks.
  3. Set up a communication scheme to track project progress. Pick the right communication channels and schedule regular meetings with your team.
  4. Introduce your brand and spread out your brand identity to outsourced developers; it will help them understand you and your business better.
  5. Plan cross-company events to get to know each other.
  6. Rely on transparency and trust.

Wondering what questions to ask before starting cooperation with an external software company? Send us an email at and let us help!

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