In their pursuance of digital transformation, companies are asking themselves: how to organize the work on IT tasks with maximum efficiency? There are various approaches to this – you can assemble a team and create the software from scratch within your company, cooperate with outsourcing software development organizations, or purchase an off-the-shelf solution.
In this article, we will consider the main issues that businesses face when choosing an IT strategy, as well as the pros and cons of different approaches.
The value of IT technologies in a business
Companies need proper technologies to stay competitive, maintain high levels of efficiency and achieve long-term goals. The role of technology in businesses is growing, facilitated by the increase in work with existing clients (59%), outreach to new client segments (47%), improvement of internal operations (45%), sales of new goods or services (44%), and improvement of sales and marketing processes (43%).
The past year has brought about changes in the development of business technologies. The majority of companies (76%) are planning to implement long-term IT transformations, with their technology budgets increased by about a third this year.
Such tendencies indicate that businesses’ strategies will include the continuous development of technology. Companies need to find the most beneficial method of organizing IT processes as soon as possible in order to increase their efficiency and profits.
What to pay attention to when choosing an IT strategy
To select the best scenario, a business needs to answer the following questions:
- What are your short-term and long-term business goals?
- What are your software needs?
- What software costs is your company ready to bear at the initial stage and in the future?
- Within what terms must new software be implemented?
Let’s take a closer look at each of these issues.
Software costs
Implementing new software can be expensive. Off-the-shelf software is initially budget-friendly but can become a costly investment in the long run. Standard software usually comes with subscription fees or additional costs for annual renewals. Moreover, time makes its adjustments, and sometimes the off-the-shelf software is not flexible enough for quick changes.
Unlike buying off-the-shelf software, building software tailored to a particular company’s needs requires a higher investment in the initial stages. However, at the same time, you needn’t worry about licensing or an increase in subscription fees. By allocating money for large upfront investments in custom software, you will gain access to better conditions in the future.
By participating in product development from the very beginning, a company has better control over the budget. Andersen – an IT outsourcing company engaged in custom software development – applies the Agile approach in its processes, meeting the needs of customers through regular and early delivery of a working product and effective communication both with the customers and within the team. When planning, they use simple and regularly updated roadmaps with complete information about the product being developed, the schedule, and the cost of each stage. This approach allows them to eliminate unexpected costs and ensure full transparency of processes.
Therefore, if a company has a sufficient budget, it is worth considering the option of developing custom software. The initial investments will result in higher returns and benefits in the future.
Buying off-the-shelf software means savings here and now, but this doesn’t imply long-term benefits in the future.
Business needs
The choice of an IT strategy should be based, first and foremost, on the company’s needs. For some organizations, off-the-shelf software is enough to fully satisfy their needs. How do you figure out if you’re one of these companies?
Analyze your competitors. If software available on the market meets the needs of competitors in your industry, it may work for you as well. Also, if you need to solve a typical and common business problem and there is no need for special configuration, you can use a ready-made software solution.
Some companies have highly specialized needs and face complex challenges due to their industry and area. One-size-fits-all software is not able to fully meet these needs, which can lead to reduced efficiency and future problems.
For example, a business needs to integrate new software with previously installed software or tools of a tech stack that may be partially outdated. In this case, developing custom software is more beneficial because it will be able to integrate with a wider range of APIs and will have enhanced compatibility with other programs.
Whatever the needs of the business are, working with a team on custom software development can be a more effective way to implement the vision of what the company’s technology should be.
Development terms
If promptness is the chief priority, it is faster to introduce off-the-shelf software. This is the best option for companies working under tight timing conditions. Custom programs take longer as they are created from scratch.
There is also an option that may be suitable for tight deadlines – a minimum viable product (MVP). Such a product is used to quickly solve a problem: test a product, validate a concept, and get feedback. MVPs don’t possess full functionality, but due to the high speed of obtaining feedback, they give their owners an advantage over competitors. This is an excellent option for startups or for large organizations working on new ideas.
If a company can afford to spend several months on custom development, the resultant software solution will meet all of its needs. Experienced outsourcing teams work quickly and fully take into account the desires of customers. As a result, a business has a chance to get a unique high-quality product that really solves its problems.
Business goals
It is crucial for companies to have cutting-edge software that can evolve together with them. If you’re striving to scale your business, custom software will give you room for growth.
As your business grows and the industry develops, it is important to make timely adjustments. Standard software is difficult to change or configure as your business scales, which can become an obstacle.
If your aim is to boost your productivity and efficiency and stand out from the competition, specialized software will provide advantages to help you do this.
Hire in-house developers vs. outsource the project
To develop custom software, you can hire your own specialists or cooperate with outsourcing teams. Let’s consider the pros and cons of both options.
Option 1: in-house developers.
In this scenario, the business can build a team of like-minded people.
Pros:
- Possibility to track and control processes, efficiency, and employees’ growth on your own.
- Ability to plan a budget.
- Personal responsibility of employees.
- Employee engagement.
Cons:
- Time spent on searching for and selecting personnel.
- Necessity to establish HR processes.
- Difficulties in motivating staff.
- Guaranteed payments to employees.
- High involvement of the management.
Option 2: outsourcing team
The format of custom software development performed by off-the-shelf specialists with relevant experience is perfect for medium and large businesses.
Pros:
- Saved time by involving a ready-made team.
- Reduced risks.
- Shared responsibility with the contractor.
Cons:
- Necessity to familiarize the involved specialists with the industry specifics.
- Higher costs for multiple projects.
Conclusion
Before outsourcing software development, it is necessary to carefully weigh all the possibilities, correctly estimate the budget and terms, and understand the business goals and needs of your company. Think long-term and plan for the long-term results you desire, and when choosing an outsourcing partner, make sure they are reliable and professional.
The advantage of outsourcing software development is that you immediately get specialists who are ready to work on your projects quickly and efficiently. However, this is only possible if you partner with a reliable outsourcing company.
