Maximize value of tech

Optimizing Software Development Sourcing To Drive More Customer Value

Diego Lo Giudice
Vice President, Principal Analyst
August 24, 2011

The past few years haven’t been kind to software developers. Having the equivalent of a US master’s in computer science and having spent the first 20+ years of my professional life developing mission-critical software products and applications, I have had a hard time adjusting to the idea that developing software applications is a cost to avoid or a waste of time for many CIOs and application development leaders. It seems to me that we have been giving more emphasis to contracts, legal issues, SLAs, and governance concerns but forgetting about how IT can really make a difference – through software development. 

Nevertheless, outsourcing kept increasing, and packaged apps exploded onto the scene, and software developers “outplaced” from enterprises. People started to believe they could get more value and good-quality software cheaper…but could they really?

With BT, digitalization, and customer centricity exploding, today is the perfect moment for application development leaders to review their application development sourcing strategy and align it to their BT strategy.

Why? Many reasons, including:

  1. Software is the most important enabling technology for business innovation.
  2. Clients use software every day. It’s become part of their life, and they enjoy the experience. Better software makes a better experience.

So, does that mean we all have to insource and hire a bunch of artisan developers to custom-make more-attractive apps for our clients? Do we all become craftsman of our own applications? Of course not!

There are still going to be applications we should buy, quickly install, and run and perhaps even outsource or SaaS, but there will also be more applications that are providing superior business value and competitive edge to help us differentiate. I have encountered many real-life examples from natural BT organizations, such as growing online banks, and even from organizations that have a low business-technology profile, such as large oil and gas companies.

 My colleague Stephanie Moore, a VP from our SVM role, would add that enterprises can’t even insource, as they don’t have an adequate in-house supply of these skills any longer. Their challenge would get worse if they embarked alone on this more innovative and differentiating software development on top of their current business demand.

This raises some fundamental questions I and Stephanie will try to answer in our joint presentation at the Forrester's Application Development & Delivery Forum 2011 in Boston on Sept 22-23 around what innovative ways app dev leaders are using to multisource and approach their application development while also differentiating.

What are you doing about this? Do you agree about the growing importance of app development for differentiation? Are you reviewing your app dev strategy and leading the change in your organization? What success stories or failures can you share?

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