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.
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.
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.
Balancing Cost with Speed and Quality is Key to Digital Adaptation and Transformation
In our last blog post, we broke digital adaptation down into four key areas: Evolving Needs, Workforce Change, The Consumerization of IT and Competitive Threats. This post, which focuses on Evolving Needs, will explain why balancing cost, speed and quality is vital as companies apply technology to solve business problems in the digital age. By definition, digital adaptation is at once disruptive and unpredictable. This fast-moving phenomenon forces companies to adjust on the fly to meet the demands of ever-changing markets, making digital transformation one of the most important movements to affect business in decades. Experts point out that today we operate in the era of “Digital Darwinism." Characterized by rapidly evolving technology and society needs that outpace business’ ability to keep up, companies that plan to survive, and even thrive, will need flexible leaders who take an “evolve or die” approach and can pivot quickly, according to Brian Solis of Altimeter Group. Clearly, there are economic rewards for companies that leverage digital adaptation to remake themselves and their processes from the inside out. Companies deemed to be digitally remade produce more revenue from their physical assets, generate more profit and command higher market evaluations according to CapGemini. However desirable these financial results are, the road to digital transformation is fraught with twists and turns. As technologies advance and capabilities expand, businesses have more options from which to choose and decide where to invest becomes more difficult. With more choices comes more risk, and the time lost to chasing a “wrong” choice can be devastating from a competitive standpoint. When it comes to acquiring the talent needed to succeed in this fluidity, the “multiple guess” influence is clearly seen. Effectively prospering and competing in this era of digital transformation means companies need to wage the war for talent using three distinct and inter-related strategies: Sourcing a wider range of skills and talent. Being able to navigate the nuances of agile. Using innovation to balance cost against speed and quality. Accurately forecasting the portfolio and corresponding volumes of skills and talent combinations needed to develop and deploy software makes up the first challenge companies need to address. While that is a tall order, the current environment of rapid change adds complexity to this mission. For example, the application development teams you have in place will see demand for their talents wane over time ─with some skills fading more rapidly than others and others enjoying heightened demand over time. What can you do today to predict the coming shakeup with confidence and actually plan for it? Once you’ve aligned that cube of possibilities, you’ll notice that the spectrum of skills you require is expanding exponentially. This expansion will most likely outpace your ability to find the talents you need at a reasonable price. This scenario is particularly relevant to companies that discover their needs have grown to encompass data scientists as well as mobile app developers. There is simply not enough money in corporate staffing budgets to afford the wide range of talent that is needed, especially in a hyper-competitive marketplace. Secondly, we know that it's no longer good enough for an organization to be able to leverage “standard” agile. You must "customize" it to fit your needs ─even as they evolve in real-time. To do that, you need to accumulate enough agile expertise to be able to spot the unintended consequences of clumsily applying this proven mindset. For example, the benefits of using a common language, sharing a time-zone, and commanding a familiarity with U.S. business culture are hugely important, particularly when projects move quickly. Sharing common ground eliminates the need to translate idioms, accommodate varying time zones and explain unfamiliar behavior. A shared perspective can enable a faster, more sustainable transition to a customized, thriving agile environment. Third, in this era when customers’ behaviors and expectations are shifting quickly, you need your development and deployment teams closer to your operation ─not geographically dispersed. The current prevalence of distributed workforces complicates the execution of a pivot, even as environmental factors call for acceleration. Creativity and innovation share two negative influences: distance and isolation. These barriers cause particular angst when speed and creativity are at a premium as they are today. Consider following the examples of noted remote work advocates IBM and Yahoo. Both companies have recently required workers to return to physical offices in an effort to regain the interaction and collaboration that accommodates change and fuels innovation. Despite this remote worker homecoming, budget constraints continue to prevent most companies from recruiting every professional they want to a staff position. Evolving needs demand that you apply a balanced model to hiring that balances three key influences at play in the talent landscape: quality, cost, and speed. However daunting this new environment may seem to be, it’s not as if business has been stagnant in the past. Companies have always adjusted their output and operations to evolving needs. Today’s challenges center on the unpredictable pace and unknown direction of those evolving needs. Those two characteristics add a new layer of complexity that makes it difficult for companies to go it alone and reduces the appeal of previously revered software development models. Offshoring development has proven to complicate the process with its “follow the sun” approach that, in the end, often delivered more complexity than the round-the-clock advantage. While it is likely that in-house teams, offshore resources, and staff augmentation will continue to fulfill specific skill needs, these options are not the answer to every phase of software development, especially those affected by the unpredictable disruption common to digital adaptation. Just as digital transformed the marketplace, it has altered the hiring environment as well. Digital adaptation requires flexibility. In these volatile times, companies that want to assure continued success will need to listen carefully to the whistling winds of change and adjust on the fly. To learn more about how to succeed as a Digirati in charge, watch for the next blog and download our digital adaptation white paper.
The 6th Man Principle
In the midst of watching the NCAA March Madness tournament, I was reminded of the 6th man concept that RSI has used since its early days. As in basketball the 6th man concept is all about having a ”non-starter” prepped, practiced, ready to enter the game and immediately start contributing to the team. This concept is core to RSI’s 6th Man principle. For many of our strategic accounts we deploy an extra colleague to participate in the upfront strategy and design sessions, kickoff meetings and daily stand ups so that when their time comes they will be prepared to hit the court at full speed. Their time may come due to an injury, an illness, paternity or maternity leave, or maybe just a packed sprint that needs the extra help. Whatever the cause we know that this 6th Man will be able to step in, run the offense and execute the game plan because they’ve been to all the practices. But wait, why would an enterprising, software development firm place a non-billable colleague onto a team? The rational is that it’s good for the client, good for the colleague, and in the long run it’s good for RSI. For the client it’s the assurance that they know there’s a backup waiting to get in the game in case something happens. For the colleague it’s a better use of “bench time” than creating a “make work” internal project or watching another PluralSight video. For RSI it’s a way to keep both clients and colleagues engaged and happy. As March Madness enters the Sweet Sixteen and Final Four rounds take notice of how those 6th man players ultimately impact the game and success of the eventual winners.
Outsource or Rural Source?
I’m sure you’ve heard: jobs are moving out of the United States, and it’s causing frustration among American workers. More and more jobs are becoming automated, but many of the remaining jobs that need human beings are being outsourced to countries where the labor force is less expensive. Technology jobs are some of the main jobs that are moving offshore. Click here to read the blog in its entirety.
Domestic Outsourcing – Transforming the Marketplace
Ask CIOs what comes to mind when they hear the terms “outsourcing” or “customer support,” and they will almost always begin talking about the large firms in India or Southeast Asia. The reason is simple. During the past few decades, companies in those regions have taken advantage of emerging networking technologies to offer low cost IT support services to major companies worldwide. But there was a cost. Companies lost the personal and specialized support that came from having a local IT resource. The voice on the phone or the technician on the other end of that email understood basic IT needs, but they most likely didn’t understand the company’s business. So, while they could help troubleshoot a bad mobile connection, they couldn’t offer advice and support based on how employees are actually using that connection. In other words, they knew technology, but not necessarily the business nuances associated with IT support for a hospital administrator or large sales force. In 2015, we experienced a shift. Domestic outsourcing in the United States saw rapid growth, with many companies transitioning to smaller, more regional IT resources offering more diverse, personalized services. An analogy can be made to the ERP software market, where behemoth providers lost and continue to lose market share to cloud-based, easily customized solutions such as Salesforce.com. Similarly the giant IT outsourcing firms are not built to offer the same level of service as smaller, more nimble providers that can spend the time to fully understand their customers’ businesses. Rethinking Your IT Strategy So, how does this apply to you and your business? In 2016, we see these growth trends not only continuing, but changing the very way the industry works. The emphasis on more customizable solutions and providers means rethinking your current IT support strategy and the value it offers. Many Fortune 1000 companies are already taking these steps. For instance, GE launched a new ad campaign focused on the importance of in-house IT skills. And many others are following suit, looking for “fitted” or more customized technology tools and solutions that provide a competitive advantage. With that in mind, it is obvious that the offshore companies are at a competitive disadvantage against the domestic firms when competing on a new playing field that rewards agility, nimbleness and a deep understanding of the business needs. Rethinking Who You Hire So, does it make sense to simply build an in-house support team that will obviously gain an intimate knowledge of your business? While that may be viable for some, it just isn’t financially practical for most companies. The demand for qualified IT talent is at an all-time high. Without successful track records and connections with the right undergraduate programs, competition for the right software engineers with the right skill set is especially fierce. In addition, the idea of working for a non-tech-focused company isn’t particularly appealing to talented prospects looking for a job. Domestic outsourcing firms, on the other hand, offer them more potential for job growth and diverse experiences – as well as greater flexibility in terms of location and living conditions. A recent study by CareerBuilder showed that 73 percent of software development jobs went unfilled in major metropolitan areas. This supply/demand gap is due to an ever increasing demand for technology skills that have made their way into every product and service that we consume. Continuing to look into the same over-fished pools for talent will not close this skills gap. Instead, the new business model in the industry is to simply leverage previously untapped or underutilized talent in second-tier cities such as Mobile, Alabama or Albuquerque, New Mexico. This approach provides scalable, talented resources in lower cost of living locations that are “sticky” due to the desirability to live in these high quality of life locations. Companies who do not want to be left behind will have to develop new and creative solutions to close this skills gap. Domestic outsourcing offers a solution that is both good for the companies that participate and for the US economy as a whole. Simply put: it means better business.