Tech Development Outsourcing: How to Pick the Right IT Resources
Question: When it comes to making IT decisions, which is more important…time to value or time to delivery?
Answer: Both! But it depends on WHO is making the decision.
If you’re the business buyer, then time to value is the focus, while the IT buyer usually places more emphasis on the time to delivery. Now that information technology buying decisions are no longer just the purview of the Chief Information Officer (CIO) and his/her tech team, technology providers need to recognize the differences in their buyers.
As technology becomes more integrated into business decisions due to digitization, the buyer can now come from a “functional” area (e.g., chief sales officer, human resources director, marketing director) or from a “growth” area (e.g., business development executive). When business-minded buyers are in the driver seat of an IT decision, the game changes and becomes more complex. According to Bain & Company, purchasing decisions are increasingly coming from outside IT, but technology providers have been slow to respond to the needs of this new buyer.
A Different Approach
At EDZ Systems, we recognize that business and IT buyers have different perspectives. They have distinct lingoes, needs, and areas of focus. They also have a different understanding of the process needed to outsource development to get to time to value and time to delivery. That’s why our founding team includes experienced IT and business leaders.
If you are that business person tasked with making technology project resourcing decisions, with or without your tech team, let’s talk about a key area that you will need to understand before you commit to that tech project — how to find the right development talent to deliver the expected business value. Outsourcing has become the norm over the last two decades as a means of accessing high quality development talent that fits the project timeline and budget.
What used to be a contract with a group of developers in India is now a much more nuanced decision. Development talent is now available in many corners of the globe, and the right team for your technology project often can be found in a nearby time zone or perhaps even at home, but that diversity of options brings complications and complexity. It’s difficult for even an experienced IT executive to know which development team is right for the project and which one isn’t.
The reality is that the right development team is not going to emerge from thin air, and a lot of time and money can be wasted on the recruiting process. Having a clear idea of how the business objectives fit with the development specifications and timeline is critical. In our experience, more outsourced development companies are recognizing the need to understand both the business and technology needs. But they aren’t where they need to be when it comes to blending the two.
Location, Location, Location
As an experienced financial guy who has been a part of many IT buying decisions, let me offer the following insight into the location factors of outsourcing. Your decision making process is not all that different than if you are hiring an in-house resource. First, you need to determine your priorities: price, speed of development, security, specific development skill, language, and culture. Then, it’s time to evaluate whether onshore, nearshore, or offshore development teams are your best fit. Here are some pros and cons of each:
According to the Deloitte 2014 Global Outsourcing and Insourcing Survey, there has been a return to a focus on outsourcing over insourcing — a shift noted in 2012 in response to “changes in political sentiment, wage deflation, and high labor supply following the Great Recession of the late 2000’s.” Optimization of vendor relationships has become the focus as well as improving operational flexibility. Outsourcing options continue to grow globally as Latin America and Eastern Europe enhance their capabilities and become more competitive with India and China. Of course, cost-savings, speed of execution, quality, expertise, and execution risk continue to be top of mind as the business of IT advances.
Outsourcing for information technology development needs is certainly not going away, and is becoming more nuanced and complex as the field becomes more diverse and competitive globally. If you need help making IT outsourcing decisions, EDZ Systems was created to do just that — we make it easier and more hassle-free. We can help you identify and source the optimum mix for your technology and business needs.
Which shore do you prefer for your IT outsourcing? Let us know by tweeting @EDZ_Systems or leaving a comment on this post.
Daryl Hubbard is a co-founder and Chief Financial Officer for EDZ Systems. He’s an accomplished strategy and finance professional with more than 25 years of experience in financial services, corporate finance, and management consulting. Daryl has served the financial needs of technology-based corporations throughout his career. EDZ Systems helps companies optimize their people, projects, and results with Intelligent Global IT Solutions, a proprietary Intelligent Resource Management System™ (IRMS), and Strategic Consulting Services.