Need to be more competitive? Then drop the outsourcing and staff augmentation mentality. In fact, staff augmentation in support of your strategic initiatives and revenue generating business model likely won’t deliver optimum business outcomes.
Not delivering results fast enough? Does the competition seem to be gaining ground on you? Then stop believing no one can influence and co-deliver on your digital strategies and software development efforts better than you.
Face it, software isn’t just the brand today — Software IS your business. Your digital strategies and investments instantiate and directly or indirectly drive your business model. That implies that your customers’ digital experience and revenue generation is directly or indirectly impacted by your software development and digital innovation strategies. Imitation is flattering, but easily achieved in this day and age. Just how can your business sustain software product innovation — that is, how can your business model sustain continuous innovation to remain competitive at the speed of business?
Here is the harsh reality: The companies that attempt to go about their digital strategies and software product development efforts internally with staff augmentation and outsourcing models are ceding competitive advantage to those that embrace product development partnerships. Mathematically, the difference (the business result) looks like 1+1=2 versus 1+1=3.
There is a difference and both the market leaders (winners) and laggards (losers) are experiencing it. In a recent WSJ post, Christopher Mims referenced a recent Frost & Sullivan survey that found that “80% of people working for organizations with more than 1,000 employees go around the IT department and use (or even buy) software that lives primarily in the cloud.” Why? Innovation at the speed of business is better found outside the business than within it today. Our employees are out-innovating our businesses and us as leaders. They know better than we, that going outside the company to find innovative ways to accomplish their jobs drives their own personal competitive advantage.
Staff augmentation and outsourcing originated with the advent of Information Technology in the business. As IT grew to support the business, so did the staff augmentation and outsourcing market – exponentially. The issue today is that many are applying an old model to a new problem.
Staff augmentation and outsourcing are still great ways to cost effectively achieve the people and technology capacity needed to implement and operate the internal systems that power our businesses. However, alluded to above, there is a whole new field of play in business strategy execution and competitive advantage. That field is the digital economy brought on by the maturing of the Internet, ubiquitous bandwidth, mobile and emerging technologies. We are no longer in need of technology to support the business and our employees, we need technology that competitively attracts, engages and retains our customers in a constantly adapting and evolving manner.
We simply can’t do it all ourselves, but staff augmentation and outsourcing won’t deliver the competitive advantage we need. As in all things business, our models of execution must evolve to keep pace with the current day and we must lead our market’s evolution to truly have sustained competitive advantage.
Digital strategies and software product development today require that we embrace a new breed of partnership. One that makes our thinking and strategies better. A partnership that delivers not just insights through experience, but one that is also clearly in command of our required business outcomes. The successful partner will not take over or own anything in your business; that should remain your intellectual property. Rather, the successful partner will leverage their knowledge of your business strategies and desired outcomes to accelerate the innovative development of your intellectual property in a collaborative co-managed fashion, which will put you in a position to achieve sustained digital product innovation to retain leadership of your markets.
Below is a comparison of the qualities and characteristics of a Product Development Partner to your business and a Staff Augmentation or Outsourcing supplier.