What is Onshore Outsourcing?
Onshore outsourcing, also known as domestic outsourcing, is an increasingly popular business model that uses US-based companies for internal business support as opposed to sending them overseas. IT offshore outsourcing to India, South America, Central America, and Eastern Europe used to be the first choice when businesses were looking to save money. However, many businesses are now choosing to bring their IT, software development, and business intelligence back to the United States to improve speed, quality and convenience while still saving money over in-house or local contractor teams using the domestic sourcing model. Rural Sourcing is a proud leader of onshore outsourcing within the United States and provides solutions for application development, business intelligence and analytics, cloud solutions, enterprise applications, QA and testing. As a cost-effective and convenient alternative to offshore outsourcing, your company will benefit from increased efficiency and productivity. Discover the onshore outsourcing definition, learn about its benefits, and see why Rural Sourcing is the country’s leader in onshore outsourcing. Benefits of Onshore Outsourcing Eliminating Offshore Outsourcing Headaches Many businesses look to external companies for business support but find that offshore outsourcing has a number of unique challenges such as time zone differences, language barriers, context and cultural misunderstandings – all which can cause delays, quality issues, and headaches. Fortunately, onshore outsourcing erases these roadblocks. You’ll benefit from real-time collaboration (as time zones are much closer) and access to a network of US-based professionals available to help ensure your project runs smoothly and you receive the product that meets all of the specifications. Increasing Affordability of IT Projects One of the biggest advantages of onshore outsourcing is that it is the perfect balance between affordability and quality. This is especially true for software development and IT projects as those industries tend to cluster around major US metropolitan areas where prices for services are generally higher due to higher living costs and stiff competition for resources in those areas. This high cost is then passed onto your business in the form of higher project charges that can be a burden and above your available budget. But, that does not mean that your only option is sending the project overseas – not anymore. Instead of outsourcing projects to another country, you can get higher quality and more affordable services within the United States using one of Rural Sourcing’s development centers located in mid-sized cities across the country. For example, if your company is located in a big city, like San Francisco or New York, and needs help with Java application development or DevOps project, it can be very costly to hire a new internal team or outside partner locally. However, if you could have access to a team of the same expertise and quality in a smaller city in New Mexico or Georgia where living costs are more reasonable, the cost of the project would be lower and more affordable for the exact same end result – a great delivered product that is on time and works as expected. Onshore outsourcing is a cost-effective and convenient solution for businesses in need of extra assistance in highly targeted areas such as application and web development, instead of attempting to manage a team thousands of miles and many time zones away. If you need IT support, and want to keep it close to home, onshore outsourcing may be the right solution for your needs. Rural Sourcing: What We Do As the leader in onshore outsourcing in the USA, Rural Sourcing is an expert in Agile Development, Cloud, DevOps, Digital Engagement, and Salesforce Integration to businesses large and small nationwide. When you work with Rural Sourcing for onshore outsourced IT solutions, you’ll support American jobs and accomplish your business goals with enhanced quality, speed and ease when compared to offshore outsourced projects. We have a network of scalable IT solutions across our US development centers, who are focused on your unique business objectives, so you can eliminate bottlenecks and headaches and accomplish your IT goals with confidence. Contact Rural Sourcing to Learn More About our Onshore Outsourcing Capabilities We’re passionate about connecting companies with talented, qualified IT professionals in the United States. With an average of 10 years of development experience, each team member brings something unique to the job. If you’re interested in learning more about our onshore outsourcing capabilities, get in touch with us and tell us more about your project needs.
SAP – The Customer Experience
A Guide To Crafting Great Digital Experiences - From Inside Out with SAP In our series on Digital Adaptation, one of the things we discuss is the importance of the digital experience, and in this series, we try to shed light on what that means in the SAP world – the SAP Customer Experience. The digital experience is talked and written about as the deciding factor in business these days. We also talked about how the consumerization of IT has raised our expectations and blurred the distinction between our business and social experiences. If the "experience" is as significant as everyone says it is, how do you achieve it? Can't you just buy the latest and greatest technologies? In other words, can’t you buy your way in? Well, maybe. However, there's more to creating an excellent SAP customer experience. You must tie together the back end and the front end while leveraging insights by gathering, manipulating and analyzing the biggest of big data. The good news is that SAP users probably already have the technology in place to do it, but like most companies are short of resources that can help. As a reminder we defined digital adaptation as the ability to predict, or perceive, quickly evolving business needs, and adjust through new combinations of technology, process, and workforce management. We also said it requires the use of new technologies; a willingness to adopt less familiar methods and the utilization of innovative workforce models. The goal is to create faster, more flexible solutions that simultaneously exceed user and consumer expectations while keeping competitors on their heels. However, we acknowledge that companies can neither afford, and do not need, to continually acquire new technology and dispose of the "old." There are trusted vendors whose technology has helped us come so far and whose technology can provide the backbone for our digital endeavors. SAP is one of these so let’s see how the technology can help on the CX side with a little adaptation in three areas: First, the SAP customer experience is clearly important. SAP is attacking the problem from both ends, as was made clear at this year's Sapphire Conference in June. According to Dom Nicastro’s Jun 18, 2018 article “Takeaways from SAP's Sapphire Now” in CMSWire “The traditional database-management, ERP, back-end enterprise software billionaire giant companies are taking on customer experience (CX) and the front-end." This is true when you consider SAP's acquisitions of companies Hybris (commerce), Gigya (customer identity management) and CallidusCloud (sales performance management and configure-price-quote). However, for as much noise as SAP has made at the front end, they already have the expertise in the back end. Second, an understanding that the fundamentals of crafting a great SAP digital experience is not just about what you see. It is about keeping your promises, which in the modern world means being able to deliver what you promised when you promised it. You need to seamlessly fuse the supply chain in the back end to the SAP customer experience in the front end, and that's about leveraging data. One of the keys to a creating and maintaining a satisfying (and differentiated) customer buying experience is the ability to harvest meaningful data. This can be achieved by leveraging SAP Business Objects for BW/HANA Analytics., SAP Gateway APIs for Fiori, and Personas technologies for streamlined UX. The digital footprints left by the modern customer provides insights into habits and preferences. These footprints enable your talented people to better shape that experience encouraging customers to return leaving even more of those digital footprints as their loyalty grows. Once more, Dom Nicastro emphasizes this as one of the essential takeaways from Sapphire. “SAP’s big play this year at its conference was the front-end meeting the back-end for complete customer experiences. That’s what marketers strive for, right? Complete customer journeys from purchase intent to actual purchase and post-product success and support.” Third, what does that say about SAP's current technology, roadmap, and your investment? Does this mean you have to invest in all the shiny new front-end technologies to adapt in the digital world? Well, maybe, and maybe not. Digital Adaptation isn’t about chasing the shiny new toy. It is about being able to look inside your existing business to liberate new enterprise and find new business models. It’s also about being smart about your current technology investments and leveraging them as much as you can. Only a small percentage of SAP users are on the latest versions or upgraded to the newest systems like S/4HANA or Leonardo. Therefore, most SAP customers rely on Basis, ABAP, function expertise, and improved business processes to adapt their systems to the digital economy. We encourage you to look at everything from SAP’s machine learning capabilities within Leonardo, to the new HANA Data Management Suite. You should also be looking at how you leverage SAP’s heritage in the back office (to help you deliver on the front end promises) and business intelligence technologies (so you can analyze and interpret the meaning of those digital footprints) by using the SAP NetWeaver Development Tools and SAP BW/BI platform to streamline and maximize the performance of your business transactions. While SAP has made strategic acquisitions in front office technologies, they continue to provision and integrate robust back-office expertise and technologies with the data management and intelligence tools they have perfected over the last 15 years, like SAP Gateway and Ariba. As Kevin Cochrane, chief marketing officer for SAP Hybris made clear at Sapphire, “SAP's main competitive advantage is its ability to connect the back and front office. That will require the use of existing technologies as opposed to going on a buying spree in new technologies only.” The importance of partnering was a big topic of conversation at Sapphire. Partnerships at the enterprise level in the SAP world have become more critical, more complex and require more than just technical and functional expertise. Maintaining the current while planning (and delivering) the future presents unique challenges. It demands partners not only with proven skills but that offer expertise in modern methods as well as innovative delivery models. No one can go it alone, and partnering and outsourcing models that worked in the past are proving incapable of delivering that singular SAP customer experience demanded by the digital world. You must squeeze all the value you can out of your current technologies while making smart investments in new technologies. While maximizing the use of existing technologies, you need partners to secure the present (supporting current systems) or help deliver the future (that SAP digital experience). These partners need to be digitally capable, technologically competent, and culturally creative. To learn how we can help you with your SAP challenges contact us at SAPinquiry@ruralsourcing.com.
Without Maturity, You Could Disappear in the Digital Economy
No business will be untouched by the Digital Economy. It affects the way organizations interact with customers, suppliers, and employees; and, as we know, it even stimulates alliances with competitors. As we move deeper into our digital adaptation journeys, the skills and expertise needed to overcome obstacles and recoup from setbacks are essential. To manage the digital adaptation process, corporations need ‘digital maturity.’ It is dramatic to say that we are in an ‘adapt or die’ scenario, but there is much truth to that claim. Perhaps a more accurate statement is this: it takes digital maturity to lead an organization through the adaptation process. As we have discussed before; digital adaptation enables an organization to predict or perceive quickly evolving business needs, and adjust through new combinations of technology, process and workforce management. What is digital maturity? The term comes from the field of psychology. It means that ‘maturity’ is a learned ability to respond appropriately in a particular environment. Digital maturity is about adapting an organization, so it competes effectively in a digital environment. For comparison, it might be useful for readers to see how 3500 business executives lined up on a digital maturity scale, from 1 to 10: An international maturity study conducted in 2017 by MIT Sloan Management Review, in collaboration with Deloitte University Press, reports that: 34% (1190) of the executives were in the early stages of digital maturity; 41% (1435) were developing, and 25% (875) were further along in the maturing process. If those statistics are reliable indicators of digital evolution, the maturation process is well underway. According to the MIT Sloan Management Review article referenced above – Achieving Digital Maturity; the leaders who exhibited the highest degree of digital maturity were able to implement systemic changes within their organization, focus on the long-term, start with small projects and evolve them into enterprise-wide projects, and secure the talent to implement the company’s digital vision. To accomplish all that, those leaders had help. Digital Maturity and SAP Based on many SAP projects over the years, we divided digital maturity into four dimensions: Leadership Maturity and Capability Data Accessibility and Accuracy SAP Technology Systems and Processes Workforce Readiness and Culture Leadership The digital economy is focused on meeting the unique needs of each customer. For that reason, digital adaptation is about tailoring business operations to be more human. Consequently, mature leaders work from the premise that digital adaptation is about building relationships, not about technology. As a result, seasoned leaders construct business models that cater to the needs of people first and avoid getting hung up on the limitations of their in-house systems. SAP announced that it collaborated with the European Research Center for Information Systems (ERCIS) to create a maturity model that enables leaders to assess, track and develop the digital skills their in-house systems need to function in the digital economy. The maturity model helps the leaders prepare for a digital future by defining a skills development strategy and reinforcing the technical environments needed to keep pace with the new economy. The model is based on a survey of 116 business and IT decision makers from 18 countries, as well as a series of in-depth interviews with 24 global companies. Data Turning data into action is the cornerstone of digital adaptation. While a true statement, turning data into action is not a linear process. It requires building a sophisticated infrastructure that lets people store, protect, and analyze information. Primarily, the infrastructure enables people to access information when they want and how they want. For this reason, the mere existence of mountains of data is not enough to indicate maturity. The term data has evolved; it is now often called Big Data. However, the mystique surrounding Big Data is fading, yet it remains the primary force pushing wave after wave of digital transformation. These waves include artificial intelligence, customer experience, in-memory processing, machine learning, and the Internet of Things (IoT). SAP has been developing advanced Data Management solutions for decades, and they recently released SAP VORA (formerly known as SAP HANA VORA), which provides enriched interactive analytics on Big Data stored in Hadoop. VORA is a query engine with in-memory capabilities, and it plugs into the Apache Spark execution framework and helps to combine Big Data with enterprise data in an efficient manner. SAP Technology Like the new world economy, SAP is maturing. For the thousands of companies that leverage SAP, virtually all of them focus on business capabilities to react in real-time, forecast changes before they happen, and enable self-learning systems. In response, SAP is developing powerful new technologies that support Big Data, Cloud Computing, and Blockchain. However, maturing companies must use these new tools and adapt them to their needs to be considered mature. We mentioned VORA, but there are other technologies that SAP has to integrate HANA and Hadoop. SAP has the following tools to integrate data between those two components and choosing the right one depends on the use case being followed. ETL tools – such as SAP BODS Smart Data Access – such as SAP HANA Smart Data Access (SDA) SAP BusinessObjects Universe SAP Lumira Workforce When it comes to the workforce and talent, nothing has changed! Nothing has changed because skills, expertise, and experience have ALWAYS been highly valued and necessary in the workplace. That said, the new digital economy has many unique and complex skills that didn’t exist a few years ago, which makes it challenging to have the right people – in the right place – at the right time. The mature business knows how to find the right people and ensure that they work on the right project and how and when to partner. Within the SAP ecosystem, hundreds of skill sets are required, but which ones are most in demand now? According to Red SAP Solutions, the following skills are the hottest and will continue to be hot well into the future: SAP FI/CO (Financials) SAP S/4HANA Finance which is part of the new SAP S/4 HANA solution SAP SD (Sales and Distribution) SAP Hybris SAP Fiori SAP NetWeaver and SAP BI skills A Time for Change We are living through the Digital Economy’s version of Darwinism. The challenge for most of us is that technology and society are evolving so fast it is hard to keep up. In response, savvy business leaders, young and old, recognize the need for a proactive change and innovation mindset. With maturity comes wisdom and, in our new economy, wisdom is the best guide into the digital world. To drive the evolving economy forward, mature leaders rely on capable partners to help. It makes no sense to go it alone. SAP systems are often at the core of Digital Adaptation programs, and technical partners have been helping clients resolve complex challenges for decades. Throughout the transformation process and beyond, a partner should support the entire organization, leveraging skilled consultants when and where they are needed. Domestic, or rural sourcing, is a solution for companies that need an IT partner but want to keep the work closer to home. To learn how we can help you with your SAP challenges contact us at SAPinquiry@ruralsourcing.com.
A 3 Step Process to Quality
In today’s digitally charged environment, executives leading software development companies consistently walk a tightrope as they balance two very different interpretations of the word, “quality.” Users’ perception of quality focuses on software that meets business requirements, while development teams concentrate on building programs and applications that satisfy product and system requirements. These diametrically opposed perspectives put software executives in the crosshairs of a heated debate as both sides attempt to evaluate quality. In reality, business requirements spring from the minds of customers and stakeholders who seek a software solution to a conceptual business challenge. Business requirements, which refer to the “what” of software development, do not translate smoothly into product requirements. In most, if not all, cases, several technology-based solutions can resolve the stated business problem. To select the most technically appropriate and efficient path to resolution, business requirements must be broken down into detailed capabilities, or “hows,” that align with business needs. The tightness of that alignment produces value for the end user customer. Loosely aligned technical capabilities are seen as less valuable by customers, often eroding the software’s price point and damaging the development company’s reputation. To protect the bottom line and reputation of a software development operations, company executives can take a three-pronged approach to extend quality assurance across the entire development process. This three-step methodology, which embraces a universal definition of quality as contrasted to value, incorporates best practices associated with a “right the first time” development approach, and calls for a cultural shift to reward the early identification and resolution of issues, is particularly relevant in today’s fast-paced marketplace. First: define quality, value For software company executives navigating this tightrope of conflicting expectations, it would be useful to distinguish between the concept of quality and its value in the marketplace. Conceptually, quality is a measurable outcome of development. The amount of quality associated with any software development project is constrained by available resources and the business priorities of a software development company. One approach to evaluating software quality uses three dimensions: Quality of design – the functions, capabilities and performance levels required by stakeholders. Quality of conformance – how a software product conforms to design, leverages appropriate standards and is completed on time and on budget. Quality of performance – how the software functions post-delivery, especially as it meets user needs, functions as intended, manages its workload, and is supported and maintained over time. While most customers will agree that some degree of quality is a baseline expectation, it is critical to understand that a high degree of quality may or may not be perceived as valuable in the marketplace. Customers perceive quality as driving value, and value is relative when compared to the software’s cost. For example, a customer’s limited budget can eliminate a high-value software solution from consideration when company finds a lower quality product acceptable because of its price. Second: Implement ‘fail fast’ In the digital world, customer expectations change on a dime, which can force development teams to pivot frequently. This rapidly changing environment, which has increased pressure on development companies to deliver software faster and at more competitive price points, calls for a new approach such as “fail fast” and “continuous integration.” However, misdirected emphasis has muddied the perception and value of the widely held fail fast principle. More than a few people place importance on the first word, “fail,” when it’s the second that matters. The success of a failing fast development initiative hinges on identifying issues, bugs and errors early in development, the sooner the better. To support failing fast, taking a “continuous integration” approach can help software development companies increase quality and keep costs in line. In this agile development practice, developers integrate their current work into a shared depository several times each day. Automated builds verify each integration, flagging problems and assuring immediate correction. As a result, the software stabilizes at a faster rate. Additionally, many software development companies share software in development with intended users at regular intervals in development. For example, presenting in-development software to users after major agile iterations can be another way to implement the fail fast approach. These frequent releases to end users brings defects to the surface faster than waiting until the development team is deep into the project to find issues. Three: Shift culture to reward early detection, correction Often, implementing a fail fast approach requires a culture shift in the software development organization. The importance of this cultural shift cannot be overemphasized. In the fail fast environment, quality assurance spans the entire development process rather than being an exercise that takes place at the end of development. When developers understand that identifying and resolving bugs early in the development cycle is rewarded, improves productivity, boosts quality and saves money, the organizational emphasis continuous improvement will begin to resonate. In the digital environment, customer expectations change frequently, and development teams must pivot quickly to maintain the tight alignment between technical capabilities and business requirements. Applying the fail fast and continuous improvement tenets to the software development process can increase the velocity of response to evolving customer requirements.
How to Best Leverage SAP’s S/4Hana in Digital Adaptation
S/4HANA has been called the engine driving digital adaptation. That is a bold statement. However, is that statement marketing hype, or is it true? To begin to answer that question, we must understand what digital adaptation is, and what it is not. Digital adaptation is not just another wrinkle in the landscape of process re-engineering. Further, it is not a system or a piece of software that drives incremental change. Business leaders who cling to these outdated ideas soon will see an erosion of their customer-base and a loss of market position. Digital adaptation enables an organization to predict or perceive quickly evolving business needs, and make critical adjustments through a combination of technology, process and workforce management. At its most rudimentary level, digital adaptation takes an organization out of a process-defined world and into a data-driven world. Digital adaptation is based on continually delivering new value to every user, raising operational efficiency and accelerating the speed-of-business to levels never before experienced. Leaders who adapt their operations to the digital economy understand that digital adaptation requires a shift in how business is conducted, and how goods and services are delivered. SAP – Scaling UP and OUT with Digital Adaptation Before digital adaptation, concepts such as scaling up and out meant opening an overseas office, merging with another company to run more efficiently, or upgrading data storage/access infrastructure. Now, scaling up and out looks more like digitizing business processes and leveraging data to provide compelling online experiences for customers, employees, suppliers, partners, and the general public. SAP is facilitating the digital experience by helping business leaders see their entire organizations clearly and focus on operational details that help them to run efficiently. The results are improved agility and better positioning of resources to seize market opportunities. Three examples of how SAP is helping to drive the digital economy are: For manufacturing, the average dollar value of invoices is decreasing as the number of invoices is exploding In logistics, the average value inside shipping containers is going down while the number of containers transported is growing exponentially For new economy companies like UBER, AIRBNB, and NETFLIX, these businesses are based more on the user-experience rather than the product or service The digital economy is stretching the supply chain and challenging financial systems. SAP is evolving with the new economy and delivering advanced user-experience and functionality for Accounts Receivable, Inventory Management, Accounts Payable, and Available to Promise functions. To answer the question posed in the first paragraph of this blog – Yes, it is true, SAP technology is the engine that drives digital adaptation. S/4HANA, Fiori and Personas are proof! For companies currently using SAP systems or planning to acquire new SAP technology, an entirely new version of SAP ERP is available to support the transformation to digital. S/4HANA is designed to significantly streamline the adaptation process by enabling businesses to be immediate, intelligent and integrated. S/4HANA – SAP’s Digital Core: The next-gen of ERP supporting operational excellence, business process automation, and seamless integration with core business systems. S/4HANA is a complete rethinking and remediation of SAP code to leverage maximum performance of their in-memory HANA database. It is designed to simplify the underlying database that slowed down R3 and ECC and made it difficult to support the high-speed computing needs of the digital economy. S/4HANA eliminates the locking and latching problems and enables dramatically higher throughput. Moreover, aggregated indexes are gone, status tables and headers are gone, and the entire database collapses into a single digital record. Making S/4HANA easier to support, a single version of the facts, and offering three environment options: off-premises, on-premises or hybrid. Add to the significant changes in S/4HANA, SAP has replaced the old traditional GUI screens with new Fiori applications and Screen Persona UIs to improve user-experience and streamline business tasks. Fiori and Screen Personas: SAP’s reimage for a greater user-experience providing personalized and simplified UX of SAP applications. Fiori and Screen Personas deliver web and mobile applications and UIs that are role-based, consumer-grade user experience across all lines of business, tasks and devices. They simplify data access and streamlines tasks for improved business processing. An intricate system like S/4HANA requires sophisticated and complex skills to design, install, configure and manage. However, to compete in the digital economy, this level of computing power is not just helpful, it is essential. You Do Not Need to Go It Alone? To thrive in the digital economy, company leaders must acquire the tools, expertise, and workforce management skills to adapt. Whether these specialized tools and skills come from internal sources or outside the organization, no company can go it alone. Installing, configuring, and migrating complex systems like S/4HANA, Fiori, Screen Personas, Leonardo, or Business Objects Planning & Consolidation require an enormous amount of expertise. But…companies desiring to move forward with digital adaptation plans are faced with a shortage of technical resources, difficulties balancing the rigors of business transformation with their employees’ daily routines and managing the often-ignored step of QA & Testing. In a world where the Internet blurs competitive differences, finding a partner who ensures that digital adaptation technology yields real-time operational capabilities, and then supports measurable competitive advantages, is essential. To learn how we can help you with your SAP challenges contact us at SAPinquiry@ruralsourcing.com.
Understanding the risks of offshoring in today’s digital marketplace
Offshoring, the approach many U.S-based companies take to secure IT talent, has lost much of its original appeal. In the past, U.S. companies sent IT jobs overseas for one key reason: to capitalize on inexpensive labor. In many cases, offshore vendors claimed hourly rates that were 80% less expensive. IT leaders, originally seduced by offshoring’s attractive bottom-line savings, quickly found out that offshoring’s challenges and risks often increased project costs, eroding the much anticipated savings. A few of these risks include: Time zone differences Language compatibility Cultural barriers Domain expertise Employee turnover Geopolitical risk IT leaders, now familiar with the risks associated with offshoring and its eroding potential savings, are replacing offshoring with a proven alternative to talent acquisition: domestic sourcing or onshoring. Domestic sourcing taps into talent inside the United States to deliver the speed to market and responsiveness IT organizations require in today’s digital marketplace. In addition, it leverages a deep familiarity of complex business problems, a depth and breadth of capabilities, access to a scalable brain trust, efficient collaboration, and attention to quality. However, determining the value of domestic sourcing has been difficult to illustrate. Today, companies can utilize the Rural Sourcing TCO Calculator, a robust tool that enables the customization of six distinct and commonly accepted productivity factors to a company’s current situation. This allows for a more accurate assessment of their total cost of ownership of outsourcing needs. A key advantage to domestic sourcing however, is its ability to deliver the agility needed to pivot IT priorities in response to changing customer expectations. It allows companies operating in this hyper-responsive digital environment to add and recast IT talent as needed. For example, this agility was recently demonstrated when one of our FinTech software clients asked Rural Sourcing to refocus our existing team and add a second scrum team to meet the regulatory demands of one of their largest clients. Taking a flexible approach allows IT teams to adjust project priorities and delivery timelines on the fly – based on the actionable recommendations that come from real-time analysis of customer expectations.
Competitive Threats Driving Digital Adaptation
While digital adaptation may evoke visions of continuous improvement and innovation-led initiatives, the real impetus behind digital adaptation is more basic – survival. 70% of B2B companies have digital adaptation projects underway in direct response to competitive threats, according to a recent poll of 300 leading business-to-business companies. Three main sources of competitive threats are looming: those from existing companies, emerging digitally native online competitors, and overseas suppliers offering lower price points. And of these three, the biggest threat is the emerging digitally native company – the totally new player that didn’t exist yesterday. They are the smaller, niche players that can turn on a dime, or venture-backed startup operations, or even students in dorm rooms, all armed with a passion for change and the latest technology. While some of these brand new competitors may be capital-challenged, they have a major competitive advantage over established players by avoiding the expense and upkeep of legacy systems. In fact, executives participating in the research mentioned above pointed to the manpower, expense and operational risk associated with legacy systems as the number one roadblock to their digital success. Internal resistance to change came in number two. It’s not just the shifting competitive landscape that trips up established companies aiming to digitally transform themselves. Competitive threats in the digital age are more complex and more difficult to defend against than traditional types of marketplace assault. Today, competitors can use a laser focus to take down a piece of business they find attractive, compromising profit and market share, one demographic or market slice at a time. For instance, the banking industry, which previously owned the relationship between the financial institution and the customer now sees a deluge of application-based companies shearing off its most lucrative transaction-based offerings. These competitors completely avoided the expensive real estate and extensive human resource requirements of building and maintaining a network of physical locations, which significantly lowered their operational costs. In addition, these digitally-oriented competitors can appear unexpectedly in an industry. Imagine the surprise to the auto industry when they found that consumers were willing to forgo visiting car dealerships to purchase a car online. Several companies emerged encouraging consumers to bypass the vehicle dealership all together. These digital-only companies allow consumers to configure, price and order a new vehicle completely online – from the comfort of their homes or offices – and have the new vehicles delivered to anywhere they choose. While each of these pure-play start-up competitors is disrupting a different sector of a different market, they share a common goal: to put the consumer back in control. B2C companies learned this lesson when, in the early days of digital, the Internet lowered the barriers to entry for new competitors. Retailers were slow to respond to consumers’ online shopping preferences and only took the threat seriously when new online-only players began to take market share from the leaders. This slow response left many market leaders reeling and caused a massive amount of physical stores to close and companies to declare bankruptcy. It’s no longer enough for executives in any market, industry or geography to keep tabs on known sources of competition. On the digital landscape, competition can come from anywhere, which means executives need to be especially vigilant about protecting their market share. To remain successful, companies must digitally adapt to build and maintain an edge over their competitors – the traditional ones they watch regularly, as well as the emerging and digitally native startups, and, even those students in dorm rooms. To learn more about how digital adaptation is changing more than just the way businesses compete, read our white paper, “An Introduction to Digital Adaptation.”
3 Key Ways to Manage Speed to Market
Today’s age of digital adaptation mandates innovation and quality – at great speed. Way back in 2000, Jack Welch, in GE’s Annual Report, warned us, “If the rate of change inside an institution is less than the rate of change outside, the end is in sight.” For some companies, delivering innovation and quality simultaneously is exhilarating, while, for others, it’s a fast path to disaster. Consider these pivotal questions: Why is it that some companies can marry methods, such as Agile and DevOps, to continuously deliver successfully, while others struggle? What puts some software companies at the forefront of market demand, while others strain to keep pace with the pack? Success, it seems, often comes down to the ability to unleash technology’s inherent productivity. "Leading technology companies have been early adopters of these capabilities and have reaped the benefits. Amazon for instance can release code every ten seconds or so, update 10,000 servers at a time, and rollback website changes with a single system command," as Satty Bhens, Ling Lau and Shar Markovitch of McKinsey point out. While most software companies' leaders would love to bask in the reflected glory of these technology icons, the reality is most of us are not Amazon or Google. But, we can all learn from these market innovators that speed is an important factor in their success. They are constantly adapting and striving to be first to market. To meet the speed-to-market demands digital adaptation presents, software executives should consider: Building collaborative development organizations to expand market capabilities. Empowering a cross-functional mindset that bridges internal and external resources. Creating partnerships that flex and reflect the need for speed. Collaboration is one of the keys to delivering software at speed and getting it right the first time. For example, traditional brick and mortar financial institutions, under siege from digital-only startups, tapped internal development resources to create their own digital products and services – often carving out a competitive advantage for themselves in the process. Marcus, an online lending platform from Goldman Sachs is an example of how digital disruption re-energized collaborative internal development to expand the firm’s footprint in an underserved market segment. Originally begun as a way for retail clients to refinance credit card debt, Marcus leverages Goldman Sachs’ technology expertise to appeal to its smaller segment of retail clients. Smaller banks have little incentive to help retail clients refinance debt, which was the driving factor behind Goldman Sachs effort to build the Marcus platform specifically for that purpose in 2016. Having a cross-functional mindset helped Goldman Sachs identify an untapped market opportunity and quickly develop a solution to meet that need. Today, Marcus has expanded from a one-product platform to a multi-product business, which has created a competitive advantage for Goldman Sachs. Finally, consider combining internal skills with partner capabilities. With the precipitous growth of niche skills, the expense of hiring and retaining these resources on staff may not be feasible for the long term. Looking to partners for these skills allows you to flex your staffing as you grow and keep pace with market demands. In addition, supplementing internal resources with assistance from a partner can enable you to deliver to the marketplace a high-quality product quickly -- likely ahead of your competition. Today’s rate of marketplace change requires innovation and speed to market – a tough order for most companies to fulfill. However, taking a collaborative approach that unites internal and external resources behind shared goals can build the sustainable competitive advantage needed to prevail.
Reengineering the Digital Experience
Today’s consumers apply the same digital experience standard to both their personal and professional lives. This merging of experiences, which calls for digital adaptation, has changed business forever. Even though each digital experience begins and ends with the customer driving the interaction, taking a customer experience (CX) only view short-changes digital adaptation’s potential to push business forward. Inside the whole of these transactions exists a multitude of opportunities to reengineer business operations from the inside out – in front office and back office, with partners and suppliers, and finally with our most important resource: our own people. Digital adaptation requires us to focus on ALL our stakeholders, especially the internal teams thinking, developing, testing, and provisioning digital capabilities for all the other stakeholders’ use. Taking a broad, sweeping view of digital adaptation enables revolutionary customer experiences, and it also helps us create a forward thinking company culture. This culture not only delights our customers, it can make our digitally adapted companies into destination employers for the talented people we need to succeed. The Back Office Experience The digital adaptation of business does not solely live in the customer experience. While it’s the digitally adapted customer experience that gets all the headlines, digital impacts all parts of the business, not just revenue. While these results are less visible, they are equally important from a competitive standpoint. Digital Adaptation serves two equally important constituencies: internal workforces and external customers. In the digitally adapted business, the term, "customers," refers to everyone involved in the purchase – the people and businesses that buy our products and services as well as the internal workgroups, teams and staff that create, deliver and support those offerings. Empower internal customers and they will look after your customers, as Richard Branson reminds us. That empowerment centers on access to the latest technologies and tools as we reengineer the customer experience. This consumerization of IT has an impactful spillover effect on our technological/digital experiences outside of "the office," which shapes our thinking "inside the office." Potential new hires assess an organization’s technological ambition and its current capabilities. Candidates don't want to work in companies that are technologically inept – refusing to adapt or failing to invest in ways that put them in the best place to succeed. This candidate and employee dilemma becomes a huge issue that sits at the intersection of culture and technology. An organization’s ability to harness the power of technology quickly becomes, from a staff perspective, personally impactful from a career standpoint. Technology moves so quickly that spending two or three years with a technologically backward company can damage an employee’s career – seriously. Not only can this time be “wasted” working on outdated technologies and methodologies, the time is lost in terms of acquiring new, more in-demand skills. In truth, this “double whammy” is more crippling to a career than the lost time itself. Digital adaptation is about more than saving money, improving operational efficiency and satisfying customer demand. It can also attract and retain the talent you need as you build your teams for the future. We do ourselves a disservice and miss out on opportunities if we restrict our thinking around "experience" to relate to the customer at the expense of considering its very real impact on our current and future employees. Thinking more broadly across the organization, from back office through the customer’s journey and back, can create an experience that makes a "destination company" for employees as well as customers. Experience tells us that companies will discover unexpected benefits in unlikely parts of the back office’s digital adaptation. Check out this case study to see how one leading beverage distributor used a single, new application to correct an order processing problem and discover an unexpected staff retention benefit. And, to learn more about digital adaptation, download our white paper.
Four Trends Redefining the Workforce Model
As digital adaptation takes hold, four over-arching shifts are converging to change the way organizations build and evolve their workforces. 1. Access to Evolving Skills In this era of digital adaptation, organizations’ staffing needs change on a dime as they respond to evolving customer requirements. To react quickly, today’s workforce models need to combine in-house candidate identification, recruitment, and more thoughtful retention with precision-driven third-party staffing utilization. External staffing resources will need to meet the needs for specific technology domain expertise, industry experience, creative workforce models, innovative engagement structures, technical innovation and creativity, and much more. Hiring organizations will prefer third-party partners that can deliver on these increasingly complex staffing requirements while adding value in new and unexpected ways. 2. Need for Skill over Scale In the past, IT demands preferred scale above all else. That’s because the type of project being staffed required rote repetition of key tasks – an assignment perfectly suited to offshoring. Today’s technology projects demand a wider range of skills in smaller quantities, as well as a heightened need for collaboration and communication. The once-dominant waterfall approach to software development has been replaced with a more relevant Agile Methodology popularized by digital adaptation’s ebbing and flowing needs. Today, the skilled project team – one that has been created and staffed for a particular assignment able to cover everything from User Experience to backend database demands – dominates the workforce landscape. Agile teams are smaller, command a wider variety of technology skills, and require broader “soft” skills such as communication, real-time creative problem solving and collaboration. 3. Demand for Innovation, Collaboration Collaboration leads to better outcomes, and that’s true across all industries and markets. In acknowledgement of this widely held belief, market-leaders such as IBM and Yahoo are moving remote workers back into corporate offices. Why? It’s certainly not the opportunity to pay sky-high rent on urban offices. It’s an effort to reclaim the creativity and innovation that comes from sharing close quarters. While not every company can make such a significant investment in expensive office space, many companies are taking time to reevaluate and rebalance their approach to workforce building. Partners with innovative staffing delivery capabilities and those that adopt the latest communications tools and platforms to encourage collaboration are winning favor as hiring organizations seek expert help in balancing cost against the need for quality output, a chief motivator behind the “rehoming” trend. 4. Push to Expand Talent Pools Although the US technology-based talent pool dwindled as offshoring started to grow after 2001, efforts to promote STEM-based education have picked up in recent years. Despite that push, the slight uptick in STEM-based hiring that happened in 2016 came about because of foreign-born STEM-educated candidates. While STEM-based hiring is on the upswing, demand for technology skills continues to far outstrip supply. Today, public and private sector hiring organizations are competing with contracting firms, staff augmentation firms, and offshore companies for a limited number of STEM specialists. To rectify that imbalance, hiring organizations are partnering with high schools and universities to foster interest in and pursuit of STEM-based careers for US students. To learn more about how organizations in the midst of digital reinvention utilize workforce partners to build out their staffs, download our white paper, "An Introduction to Digital Adaptation.”
Why Rural Sourcing is the Next Starbucks
True confession, I’m a Starbucks coffee fan. Each day starts with a triple grande nonfat cappuccino. I’m also a big Howard Schultz fan; I even have an autographed copy of his book: Onward. More importantly, I respect his social and civic activism as well as admire his vision of creating a 3rd place to have a coffee experience. Whether you like the Starbucks brand or one of the tens of thousands of other coffee options in America it was Schultz’s vision of creating a third place that began this lovefest with the consumption of coffee somewhere other than your home (#1) or your office (#2). This vision created a new alternative at a scale that didn’t previously exist. The Rural Sourcing business model follows the same concept and vision. Up until recently, businesses had two options for their IT workforce strategy. Businesses could bring in the talent to their office in their city, often at expensive hourly rates, or they could offshore the work to an outsourcing firm for less expensive hourly rates and figure out how to manage the cultural, language, and time zone challenges. At Rural Sourcing we saw the need to create that third option at scale. Onshore domestic technology talent is abundant in smaller cities such as Albuquerque, NM; Pensacola, FL; Augusta, GA; or Mobile Alabama. These cities, complete with large universities, low cost of living and high quality of life, represent millions of available technology talent waiting to be deployed to solve IT problems for the world’s greatest companies located in much higher cost locations. Rural Sourcing selects cities like these based on our proprietary data analysis of the qualified talent pool, the quality of life and the affordability of living in these locations. We then establish software development centers complete with the look and feel of a Google-environment where software developers and quality engineers can focus on creating applications to support our client’s on their digital journeys. The beauty of this third option, unlike Starbucks, is that it actually costs less than the other available options. With a substantially reduced cost of living in these smaller cities, the dollar goes a lot further than in San Francisco, New York or even an Atlanta. Also, when measured against offshore, domestic sourcing is more cost-effective when evaluated by the total cost of ownership or TCO of completing a successful project in today’s agile software development world. I’m not saying that businesses shouldn’t consume the available talent within their own cities or even offshore, as both have their respective roles to play in the sourcing strategy. For certain types of projects, these sourcing models may be well suited for the task. What I am saying is that there is a new coffee shop available that serves an amazing third alternative that may just taste better than your traditional sources. Find out more about our blend of services here.
Workforce Changes of Digital Adaptation
The advent of technology-empowered global workforces fundamentally changed the way employees and employers engaged. Technology connected workers around the globe, dissolving geographical boundaries. Today, fast-moving markets and customers’ ever-changing needs are creating an almost relentless pressure for companies to reinvent themselves and their employee models ─ again and again. How Offshoring Lost its Luster Digital adaptation arose from two significant workforce changes: (1) technology-enabled global labor; and (2) a geographically distributed workforce. These two fundamental shifts created a category of worker known as the “offshored.” As the Internet-connected workers around the globe, companies gained access to an international workforce that performed like local employees. Often, “follow the sun” development teams fast-tracked projects at near warp speed as compared to domestic-only, traditional workforces. At first, offshoring saved a lot of money for US-based companies that were able to move work overseas, take advantage of labor arbitrage, end benefits programs and layoff layers of middle management. For many companies, offshoring was a beautiful thing until one day it wasn’t. What began as a move to more cost-effective, less management-intensive workforces quickly exposed unintended, negative consequences of offshoring on two highly desirable outputs of work: innovation and collaboration. Lack of business context, ineffective communications, and virtually non-existent creativity constrained offshoring. The desired collaboration, communication, and innovation US companies sought from their offshored workforces did not materialize from a raft of geographically separated, workforces. For some, offshoring has become categorized by an untenable disconnect with customer demands. While the sheer economics of maintaining urban offices doesn’t support bringing everyone back in-house, a compromise must be found that balances budgetary constraints against digital adaptation’s need for collaboration. In many cases, employees’ preference for working from their home offices using online collaboration tools is helping companies move closer to this balance. However, a lack of specialized talent continues to plague companies’ looking for experienced assistance. In these instances, the availability of niche talent prompts companies to accept assistance from specialists who are dispersed geographically. While companies pioneering digital adaptation may have to use some distributed workforces, partnership models need to promote vitally important communication, collaboration, and innovative thinking. Digital Adaptation Matches Teams to Projects In the digital age, scalability, the massive availability of skilled workers, gives way to teams comprised of workers with diverse skills and mindsets. These teams will be created to meet the specific requirements of the project at hand, and they will be disbanded at the project’s completion. The constant change characteristic of digital adaptation demands a flexible approach to skills acquisition. The ability to quickly construct, manage and get the team to full productivity will become a key requirement for corporations. Acquiring new skills and a dedication to lifelong learning will become table stakes for employees in every workforce, whether traditional, distributed, outsourced, or contingent. At its heart, digital adaptation requires more management, more communication, and more collaboration –not less. As Daniel Newman pointed out, traditional leaders quickly became stumped as to how to manage these diverse and divergent groups of individuals. That’s why new workforce models, while a good place to start, require new management models as well. Digital Success Depends on Effective Recombining of the Workforce Workforce models and effective management approaches for fluid teaming present two of the most perplexing challenges in digital adaptation. Simply put, the traditional workforce models and proven management approaches don’t work. How effectively you combine and recombine people will determine your success or failure in the digital world. Companies knee-deep in digital adaptation need to get comfortable with constant change and reinvention on the fly. To learn more about how to navigate this complex landscape, download our white paper on digital adaptation or read the blog series on this fundamental sea of change.