(What follows is an excerpt from “Synergea: A Blueprint for Building Effective, Globally Distributed Teams in the New Era of Software Development” by Andy Hilliard.)
Like other aspects of multinational management, finding the right partners to include in your tech value network requires a new, expansive, and more open mindset. The traditional model of issuing formal RFPs and working through rounds of negotiations to find the most attractive suppliers is essentially dead. Lower-quality service providers have become adept at responding to RFPs, but when you meet them in person they’re often not what they purported to be.
What you really want to do is find organizations that share your vision for networked collaboration. Way back in the early 1990s, organizational researcher James F. Moore coined the phrase “business ecosystem” in a 1993 Harvard Business Review article called “Predators and Prey: A New Ecology of Competition.” He described the term as “an economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world.”
He went on to say that stakeholders throughout the ecosystem (including suppliers, lead producers, competitors, and others) “coevolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments, and to find mutually supportive roles.”
The software development industry has been moving toward the establishment of these types of relationship-based networks for some time, although frankly, it’s been hit or miss until recently.
In a fascinating paper called “Supply Chains and Value Webs,” published by Deloitte University Press in 2015, authors Eamonn Kelly and Kelly Marchese pretty much predicted the rise of tech value networks in their description of how business ecosystems had come of age. “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.”
It all comes back to the unstoppable force of innovation that drives the most successful companies. And because of this, I truly believe that if firms create their own tech value networks, they’ll be more likely to become ecosystem leaders.
Establishing your own tech value network is a worthwhile but complex challenge that may never stop evolving. You’ll need to implement and manage new ways of working and processes for integration across your web of functions and relationships, including:
- 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 trusted, mutually beneficial relationships
You’ll get the most out of a multi-partner network that evolves from a well-thought-out strategy. And, as you gain more experience outsourcing projects and managing multinational teams, you’ll get a better sense of the resources you really need to reduce risks and costs while delivering desired business outcomes in a fraction of the time.
Companies used to hire people internally to write code, do capacity planning, maintain equipment, ensure security, and manage network load balancing. We still need all these things today, but with all the cloud platforms, code frameworks, and pre-built components available, it’s never been easier to get started building software.
Any developer with a credit card can stand up a virtual infrastructure, but that doesn’t mean they have the skills or knowledge to make it work. And it’s the same with your internal team: They may be experts on how things have been done and are currently done at your firm, but they may not have the experience, the bandwidth, or even the motivation to take advantage of the new capabilities out there.
So you may need to expand your horizons for the supplemental and new technical skills you need to design with the architectures, security models, languages, and frameworks that can sustain your business needs.
Tapping into a tech value network allows you to move fast and break things, learning, filling in gaps, and adjusting the details of your plan within your overall development strategy. For example, you may need expertise in selecting a toolkit or framework, or maybe someone with deep database expertise to help get you on the right path. Or you might need help making sure that your system is as secure as you think it is, or planning how a new program will work with the existing systems you have.
The right combination of partnerships creates value that’s greater than the sum of its parts. When you have a network that’s configured around specific providers contributing best-in-class skills to your organization’s application development chain, you create a collaborative environment that inspires new ideas, streamlines work practices, and fosters continuous improvement to deliver benefits such as:
– Lower development costs and increased efficacy
– Fewer IT-related business disruption risks
– More sophisticated data and insights
It all comes down to the essential questions this book has attempted to answer. How do you manage effectively across a wide variety of resources from different cultures? Do you take that on yourself? Do you try to find a partner that’s already doing it? How do you vet their ability to manage teams across countries, cultures, and time zones themselves?
It’s not an easy problem to solve, but if you crack the code of strategic resource allocation and cross-cultural collaboration, you can super-charge your development efforts with the perfect balance of speed, efficiency, cost, and quality.
Synergea is available now wherever books are sold.
© 2024, Andy Hilliard. All rights reserved. Published by Accelerance, Inc., Redwood City, California
As CEO of Accelerance, Andy Hilliard 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. Hilliard 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. He is the author of three books, including “Synergea: A Blueprint For Building Effective, Globally Distributed Teams In The New Era Of Software Development.”