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Driven by the rapid development of info-communication and transportation technologies, which make inter-organizational cooperation and coordination easy, traditional corporate structures started to loosen along competences. Companies nowadays are focusing on their core competence which delivers the most customer value and carries real differentiators against competitors. Office cleaning, bookkeeping, and manufacturing are popular fields of outsourcing as well as software development which requires special company culture and management approach. So, hey, do not do software development unless it is your core business! Instead, outsource this function. (You are more than welcome to the community of happy Blackbelt customers.)
Yeah, but there is another market phenomenon which is the digital transformation of traditional sectors. In our age, it easily happens, that a mining company, for example, develops a software application for in-house use, later they start selling it to other mining companies, and finally they sell the mines to focus on the more prosperous software business. It is a typical software innovation lifecycle which makes a traditional company a software company.
OK. It is getting started to be confusing, isn’t it? To outsource or not to outsource? Is that the question? Not really. The right approach to this topic is to be conscious where you exactly are within your innovation lifecycle and act accordingly.
Let’s say, you are not a software company but something opposite. Accounting, headhunting, business consulting or else. The point is that you have a software idea to provide more customer value, distinguish yourself in the market competition or simply to lubricate an internal process. What you do not own is software development expertise.
Therefore, in the phase of ideation, you need a consulting partner who guides you through the first baby steps in the world of software and helps you create a prototype very quick. After you successfully validated your idea, you still need an experienced partner to design sustainable software architecture, down-to-earth development agenda, and realistic budget.
Some months later, having the MVP (Minimum Viable Product), it’s the time to scale up the team to provide manpower for the widening scope of the development. And it is a decision point! You can continue the software innovation in the so-called custom software development model, or you can have a partner build an out-staffed team for you. The out-staffed model gives you the chance to take over some innovation management functions from your partner. It can be an important step on the path lead to a software company being.
Ready? Okey-dokey! Let’s go on! Let’s start coding! It is crucial to building your software product onto a solid foundation which can be provided only by a really senior software developer team. Because you don't have one, you need a partner again.
After a time, when your corporate organization transformed into a software innovator company, you can have the feeling that outsourcing one of the most important business function, which is software development at this time, is inconvenient. So, you make a hard decision again taking over the entire development organization into a brand new R&D center. (We have strong arguments why Budapest is one of the best venues for this.)
What an adventure! You sketched up and validated a new software product, launched its development thoughtfully, have a team built up, and finally, you have an own software development R&D center. Hey man, you became a software company! Congrats!
Did you like the story? Yes? Okay, you only need a good partner which can support you through the stages of the entire software innovation lifecycle. (Surprise, we recommend ourselves.)