Propelled by economic uncertainty and a talent crunch, CTOs are turning to outsourcing, yet this approach is only effective with the right partner
Amid post-pandemic woes and the cost-of-living crisis, energy price spikes and the tech talent shortage, many industries are living in volatile times. Yet one thing’s for sure, businesses still need a pipeline of skills, capabilities and the right people to deal with change. Scaling technology-led initiatives is also seen as an answer, vital to future-proofing firms, yet delivering on all these aspects is now a real challenge.
The fallout of Covid-19 means that demand for hybrid and remote working is still sky-high. Wages and inflation have been soaring, while workers are difficult to hire and retain. This is why managers have become adept at overseeing distributed workforces. This has created a demand and willingness for outsourcing, as CTOs continue to roll out ambitious digital transformation programmes.
In a recent survey of 300 IT leaders, 64% of companies said they had adopted a new outsourcing strategy due to the global pandemic. 54% are now outsourcing to gain access to talent and save on costs, while 41% polled are outsourcing to bring in new knowledge, tools and experience. As the economy enters a turbulent period, deploying tech consultants can be a useful tool when it comes to delivering business resilience and agility.
“CTOs still need to deliver on multi-year, long-term projects despite all the current issues. If their businesses are to grow tomorrow, they also need to be able to try out and scale new software solutions or digitally transform, without the risk of deploying huge tech teams in house today,” explains Vlad Nanu, co-CEO of Amdaris, which is one of the fastest-growing UK software development companies and a digital transformation specialist.
“However, just like at the beginning of the pandemic, there is a level of heightened uncertainty right now, but the direction of travel is still the same. All industries, whether that’s healthcare, the legal profession or publishing, are in the process of transforming digitally. It is why enlightened players are looking for more flexibility, and cost-effectiveness when it comes to their technology solutions.”
Scaling from two to 25 to 100 developers and back again on demand is not possible with in-house tech teams in the current talent crunch. But if digital projects become successful then this kind of scalability is needed quickly if businesses are to be competitive. This involves locating hard-to-find talent at lightning speed. This demand may also be project-based and need to flex. Outsourcing can meet this need, yet finding the right partner who understands a business’s priorities is crucial.
“In the past, offshoring software development, say to Asia, has given businesses an advantage. But now digital transformation and IT projects are more complex, real-time solutions are needed that are tailored to local markets so nearshoring makes more sense,” states Andy Rogers, co-CEO of Amdaris, which employs over 700 developers in the UK, Europe and the Middle East, working with the likes of Knight Frank, Pearson and musicMagpie.
Increasingly, businesses also want to partner with a software developer that they can learn from, who can deliver value-added services, long-term solutions and deploy diverse talent pools which think differently about problem-solving.
There is an increasing realisation that innovation in newer technologies, whether it involves 5G, AI or blockchain, also requires innovative and disruptive thinkers. Gone are the days of simply implementing prescribed and rigid systems set out by management consultants. Trial and error, agile ways of working, continual A/B testing, co-creation and refinement of a minimal viable product are vital.
“That’s why we’re working with hundreds of developers. We’ve teamed up with local universities and schools in our delivery centres, we also run programmes where we have female ambassadors and promote women and individuals from diverse backgrounds in technology. We set our own diversity goals for our large outsourcing teams. This is not easily possible with smaller in-house tech teams,” details Rogers from Amdaris, which was recognised as ‘business of the year,’ in the UK’s South West recently.
In the same poll of IT leaders, 74% said they believe that outsourcing partners can now help improve or adopt better software development practices, for example agile delivery, quality auditing and technical excellence. Outsourcing partners can also offer value-added services beyond mere coding, whether that’s product design or business analysis, stakeholder management or project planning.
“Right now, there is a lot of interest in drawing experiences, know-how and innovation from one industry and embedding it into another. Whether it is legal services and insurance learning from ecommerce or education adopting practices from service sectors. Today, outsourcers, as opposed to in-house tech teams, are in the best position to cross-fertilise with their ideas, blue-sky thinking and ideation to disrupt industry norms. They do this using knowledge gained in other sectors and do so in a cost-effective way,” points out Nanu.
Amdaris has averaged 40% a year in growth in revenue and headcount, with teams in the UK, Romania, Moldova, Ukraine, Bulgaria and Dubai.
The situation CTOs will have to deal with going forwards is only going to become more difficult. Talent attrition and loss of institutional memory are significant for those with digital skills. The same poll found that 36% of tech and software developers are looking for new opportunities within the next year. More than a third of this workforce could be on the move. Almost half say their roles are busier since the pandemic – burnout and churn are inevitable.
“It’s why outsourcing is now a no-brainer. It’s about the three Rs: Reliable expertise that’s on tap. It’s about developing resilient organisations, who need to be agile and adapt to new market conditions with velocity. Then there’s resourcefulness. Partnering with the right outsourcer means you have access to a whole host of talent that can drive disruptive innovation,” says Rogers.
“Times have changed,” he adds.
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