Staffing Challenges for Ambitious Software Product Companies

Gertjo Tigelaar By Gertjo Tigelaar on May 28, 2013

A serious investigation into growth ambitions and how to make them happen.

A short while ago, we had conducted a research to understand ISVs, their growth ambitions and their view on how to staff their development in order to reach those goals. Although the economy has not been too friendly to all of us ever since, we still face the fact that good people are hard to come by, and lack of good people is a blocking factor in realizing company growth. 

offshoring product development

Since the core of what ISV's do is highly custom, and very specific, ISV's are dependent on excellent people to ensure that their products are cutting edge. Making good software products is still a pretty difficult thing, and regardless of excellent tooling and ever improving best practices, you simply cannot do it if you do not have the right people on board.

Software companies are still amongst the highest potential earnest in business, because solving a business problem is simply worth a high prize tag. But to achieve your goals, an excellent team is a must.

Services versus products? Or Services because of the product?

In the software industry, there is this ever ongoing balance between services and products. Even in the time of SaaS, still there is a product in the core of what ISVs do. And if you have a product that solves a complex business problem, then it is also hardly imaginable to be able to deliver that solution completely without services. So all in all, what we see with most of our customers and in the market in general is that ISVs need both. And both are very dependent on good people. The question is not product versus services, the questions is who does what! Successful ISVs find crowds of partners getting in line to deliver services around their products, while smaller ISVs need to think of ways to deliver the required services directly. And throughout the life cycle of your company, you need to decide where to invest most: is it in delivery, sales, development or maybe even support. Each situation demands different people, and different partners to help you in reaching your goals.

Options you have for staffing development

When it comes to staffing development, what we found is that most companies prefer to have a local, onsite team, ideally seated together to be a lean and mean as possible. However, there are quite some situations in which this is not easily accomplished. Even today, finding good staff locally is not an easy task, and there is a good chance that lack of access to qualified staff will be hampering your growth potential. 

Challenges for ISV

Keeping development teams close together, and as lean and mean as possible is a good thing. Breaking down complexity in software development by using short cycle development methodologies surely helps, just as much as scrum like methods help teams to focus on building the right things, and building them right. 

So there are quite some ingredients in the ideal development team concept that make perfect sense. However there is one thing that is not: the location of the team. There is no clear reason why a team would need to be sitting locally. If you can keep the team together, and if you can have the team work with best practices, you might probably be better off with an offshore team of qualified people and the right headcount, than with a local team of less qualified people that is constantly understaffed.

Western labor Market

The Western labor market is limited in size but not in quality. You can find really good people here who can be retained for a longer period if you dedicate yourself seriously to this end. This comes at a high price tag. Unfortunately, the number of people who graduate each year in Western countries is small and the competition to recruit them great. There are enough interesting jobs, which is what makes it so difficult to find sufficient motivated and good people. The numbers are low, but in the coming years they are only going to decrease, while large numbers of older employees will be leaving the labor market. This will mean that you will still have to pay top money for less good and less motivated people. And even then you will not be able to satisfy your capacity requirements.

Consequences

Does this mean that companies are going to have to leave their local home base? Or that companies will have to just pass up on opportunities to grow? We do not believe so.

Alternative staffing options for ISV

Alternative way of working

A country where exactly the reverse is taking place is India. A young, strongly growing population, with more and more people who are graduating from university and are highly motivated. Through deploying these people, and linking them with Western knowledge intensive companies, these innovative companies with ideas and potential are linked with motivated, intelligent and highly educated Indian professionals who can answer the demand for capacity. Through the use of modern means of communication and regular travel, effective cooperation runs smoothly. Especially if you have a dedicated team at your disposal. This allows Western companies to grow and offers Indian professionals a challenging and fulfilling job with an internationally oriented perspective.

Read the Full report?

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