Insights / The Outlook of Outsourcing: Your Own On-demand Tech Value Network
The Outlook of Outsourcing: Your Own On-demand Tech Value Network
Feb 8, 2022 | Accelerance Blog
As companies seek to become more digital at a faster pace, they’re finding a traditional value chain approach just isn’t cutting it.
They’ll need to add the right tech skills at different points, ramping them up or transitioning them, in order to deliver the right software to meet changing internal and external demands at the exact right time.
In the digital era, companies need to reinvent their resourcing to a flexible, scalable network model. It has become a must-have practice to be a nimble future competitor.
The vertically-integrated value chain between customer and supplier is no longer flexible enough to deal with the needs of businesses requiring software with a greater breadth of features for a more complex world. Agile is the name of the game for tech sourcing as well as for development.
It’s not just about big, chunky coding projects anymore. The digital transformation that is transforming the business world is multi-faceted, spanning everything from established technologies like e-commerce and mobile app development to bleeding-edge ventures into augmented reality and nanotechnology.
In this shifting IT environment, more adaptive, distributed supplier ecosystems are becoming a new norm. It's the rise of what Accelerance calls the "Tech Value Network" - essentially a portfolio of pre-vetted partners and suppliers easily accessible on demand.
Accelerance pioneered that business model over 20 years ago, resulting in its world's largest network of hundreds of certified software development outsourcing firms ready for quick deployment. It's the ultimate source for clients to tap for a wide range of resources and capabilities.
“For most of our 20-year history, Accelerance has been perfecting what we call 'Tech Value Networks.' We figured out early that this model was the way to go, putting a world of certified partners and skills at our clients' service, without prohibitive overhead or terms. We saw how this approach delivered better value, higher-quality service and more sustainable relationships for clients over the long term."
-Andy Hilliard, CEO of Accelerance
More and more companies now are creating such networks - within their geographies and beyond - as an extension of their business. They proactively assemble a ready source of proven skills to meet increasing acceleration and specialization in software technologies and platforms.
Rising complexity has meant that no one company can have the full range of capabilities in-house any longer. Tech Value Networks deliver that breadth and depth. Businesses can secure the most appropriate software development expertise from multiple companies, tapping into expert knowledge and scaling activity up and down as required.
Making the Connections
Businesses now require software with an ever-increasing range and complexity of features. IT leaders are facing the need to make decisions and staff for platforms and languages that they themselves may still be working to grasp strategically - such as new cloud technologies, artificial intelligence (AI), the Internet of Things (IoT), robotic process automation (RPA), DevOps and other fast-track solutions.
No single company has the full range of these skills on hand Instead, it is about identifying capable, potential partners early on to fill gaps when they arise - which they are sure to at an increasing pace.
When your Tech Value Network is in place, you're future-proofed and resilient. You can flexibly pull in any partner's skill set at any time, as required. This just-in-time approach offers the flexibility that companies will need to be nimble and competitive in a fast-evolving competitive environment.
Tech Value Networks mark the evolution of IT supplier models from a tight, self-managed structure to a more fluid, hub-and-spoke framework.
The evolution of software development:
From self-management to partner networks
Accelerance's global software development network brings the world’s top firms together into one proprietary hub that you can use, without having to build all the spokes yourself. We've curated the best partners - only the top 1% of software firms worldwide make the grade for our certified partner network. Our portfolio firms cover 100+ technologies, platforms and programming languages with development teams specializing in new and emerging skill sets that are continuously being vetted to fill any gaps.
This type of network gives you fast access to highly sought-after skills, at the level and time you need them (within days, not weeks or months). No wonder software outsourcing partnerships are gaining popularity as the shortage of domestic software engineers for open positions tops 1 million in the United States
The connections are transcending borders, mirroring the new work practices of business in the post-pandemic reality. We've seen centers of excellence consisting of top-tier firms in specialized areas of software development emerge all over the world. These carefully chosen partner firms in areas such as Latin America, Central & Eastern Europe and South & Southeast Asia have gained proven experience in working with Western clients.
Innovative IT leaders like Yogish Suvarna, CIO of Aspen Dental and now MyEyeDr., foresee the networked approach as the next big thing in organization of technology functions for agility and success.
"One of the biggest challenges that every technology leader faces is sourcing the right talent at the right time to meet the constantly changing needs of the business...My advice is to surround yourself with innovative companies and partners who can help you and your team with meeting business needs and bridge the gap in your ever-changing talent needs," Suvarna told The National CIO Review.
Such value networks proved their worth during the pandemic. Fully 79% of businesses credited their strategic partners with providing critical support and flexibility for the recovery, according to Boston Consulting Group insights.
As a result, companies upped their investments in those proven relationships. "Many companies that turned to their providers for support are expanding their relationships with them," BCG reports.
The Network in Action
So what does a Tech Value Network look like in practice?
But technology is rapidly expanding the possibilities. Consider the healthcare provider’s situation:
AI-driven decision-making is improving the speed and accuracy of diagnoses.
Patient portals and clinical software suites are increasingly integrated with Salesforce and other CRM platforms.
Wearable devices mean patients can better manage their own healthcare in the home and telemedicine is making remote consultations quick and effective.
Privacy and security are paramount in healthcare, so you’ll likely be investing in world-class systems to store and transfer patient data and meet regulatory requirements.
It may be that half a dozen specialist partners help you build all of this valuable capability to a very high standard with Salesforce at the core. It's a done deal in a one-stop network like Accelerance: You'll have your pick of the best Salesforce skills available globally, as well as any other programming skills that you might need for a successful solution.
The connection focus of the Tech Value Network makes it happen. Partners play pivotal roles in this outcome-centric model. Best-in-class, specialized development teams plug in where they best fit for as long as they are needed.
It’s a better approach to software development that experts who follow software industry trends also see taking hold.
“If I’m going to move quickly, I can’t just grow my technology stack when I need to. So I’m increasingly dependent on third parties,” says Bobby Cameron, vice president and principal analyst in a Forrester Research report.
“I’m going to have shorter contracts with fewer players because I’m contracting for a platform — not all of the individual elements — and that allows me to move around the ecosystem to pick up the players I need to fill in holes I have. I can do it relatively quickly and easily,” adds Cameron.
Real-time, Multi-vendor Partnerships
We are working with a growing number of clients who are eager to pursue the multi-vendor approach. They're interested in tapping into our Tech Value Network that might include domestic, nearshore and offshore options. Think US, Costa Rica, Poland, and Vietnam or another similar mix that provides different timezone advantages (collaborative and follow-the-sun), and partner-specific skillsets.
Businesses that lack key technical skills need to be able to quickly access the deep expertise of trusted software developers in everything from IT architecture and microservices to cloud platforms, artificial intelligence and machine learning. They appreciate the reduced risk of not having all their eggs in the same basket.
With contracts typically shorter in duration, they are able to hedge against uncertainty. If an outsourcing partner’s operations are disrupted due to pandemic restrictions, or some other unforeseen event, development isn’t going to grind to a halt.
As these types of fluid relationships mature, we are seeing new types of networks emerge. Like-minded companies with similar requirements are banding together to offer work to outsourcing partners, benefitting from greater surety of supply, partner loyalty and even better pricing as a result.
In the Tech Value Network, we also see a community of vendors more willing to share ideas and expertise. That's because they are not directly competing with rival players which is common when single-source development partners face off against each other for sizable contracts.
One of the most exciting aspects of the work that we do at Accelerance is identifying perfect-fit partners who go on to form crucial components of the Tech Value Networks that our clients seek to create. With the accelerating trend toward networked business models, they are looking to us for advice more than ever. There is an ever-expanding universe of new programming languages, platforms and technologies to sort through in tech sourcing.
We help clients answer the most critical questions. For instance, in the case of an emerging technology project, do you opt for a proven programming language that has demonstrated its worth across many software applications, or test out a new language that better addresses the unique technical needs of that leading-edge application? It can be a hard call to make without an advisor who has the latest experts in the world on hand.
Build Your Own Tech Value Network
Developing a Tech Value Network requires a change in mindset. The traditional model of issuing a formal RFP and working through rounds of negotiations to find the most attractive supplier is essentially dead due to its tendency to be "gamed" while attracting lower-quality service providers.
"As ecosystems become more central to business strategy, the core value of the profession will be less and less in getting the same things done ever more efficiently, and more and more in the strategic pursuit of creating new value, achieving breakthrough performance, sustaining growth, and - once again - changing the world," according to Deloitte Consulting supply chain trends.
Establishing your own network is a worthwhile but complex challenge. You'll need to implement and manage new ways of working and processes for integration across your web of functions and relationships:
New purchasing arrangements that see evolving and flexible configurations of partners based on the business requirements for access to resources and skills.
Greater cooperation between formal and informal networks of suppliers and their customers, including knowledge sharing for best practices and performance.
New types of partnerships, outcome-driven incentives and risk-reward terms that support building trusting, mutually beneficial relationships between a business and its suppliers.
You'll get the most from a network that is evolving from a well-thought-out upfront strategy - not cropping up around random new projects. An experienced advisor can help you with a longer-term vision that helps you develop and mature your network across an effective, long-term approach.
The Benefits of the "Network Effect"
The right combination of tech partnerships creates results that are more than the sum of its parts. The Tech Value Network is configured around specific providers contributing best-in-class skills to an organization's application development chain.
The environment of collaboration and co-creation inspires new ideas, work practices, continuous improvement and more to deliver benefits such as:
Driving game-changing technology innovation
Improving software product quality and performance
Reducing development costs and increasing efficacy
Mitigating potential IT-related business disruption risks
Providing new perspectives for learning and innovation
Generating more sophisticated data and insights
Accelerance has seen these benefits firsthand over the years. After thousands of successful partner-client projects, we know the players and can help you to manage productive relationships in a multi-vendor, distributed situation.
If you are looking for greater agility, flexibility and innovation through tech partnerships, reach out to an experienced Accelerance advisor. Get the scoop from the early movers in Tech Value Network development.
Accelerance is the premier global outsourcing advisor delivering top-tier software development resources and providing professional consulting services. We have curated the world’s largest network of proven software development partners by personally vetting and certifying the top 1% of firms across 40+ countries, covering 100+ technologies across 60+ industries.
Our trusted advisors help clients develop and implement optimal software outsourcing solutions through better planning, better partner selection and better engagement management. Trust our proven approach to reduce outsourcing risk and costs, ultimately delivering desired business outcomes in a fraction of the time.
As CEO, Andy leads and advocates for the globalization and collaboration of great software teams with companies in search of talent, innovation and a globally-distributed extension of their engineering function and culture. Andy founded the ground-breaking nearshore software development services company, Isthmus Costa Rica. He began his global software services career as a division manager at Cognizant during their early formative years.
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