by Beth Bacheldor

Outsourcing App Dev Requires Strong Partnership with Providers

Jan 26, 2010
Enterprise Applications

Companies shouldn’t shy away from outsourcing app dev, but be sure providers 'sit on the same side of the table.'

I’ve written before that application development outsourcing has been on the downturn, largely because of the recession and painful economy. For several years, application development was the most popular form of outsourcing, according to market research and analytics firm Computer Economics. But when Computer Economics surveyed companies late last year, hiring service providers to develop new systems and applications was losing favor.

Back when I wrote that blog, I said it was a bad idea for companies to but the brakes on new IT initiatives. Luckily, some service providers are evolving to make it more palatable to do so. How? Rather than make and charge for one-time deals, or even multi-year deals, in which the provider designs and builds an IT system or new application and moves on, some providers are becoming full-fledged partners with their clients. They make money on new systems they’ve designed for their clients when those clients make money from those new systems.

One such provider doing this is Symphony Services. Founded in 2002, the Palo Alto, Calif., company is a full-service product engineering firm that does everything from software development and embedded systems development to consulting. A few weeks ago, I spoke with Jerry Smith, CTO for Symphony Services.

Smith believes application and software development outsourcing will gain momentum, largely because fewer and fewer companies have the IT staff on hand to initiate and manage those projects and because more and more companies need software development skills that exceed the capabilities of their current IT ranks.

“This is emerging,” Smith said during an interview we had over the phone earlier this month. “On the enterprise information services side, we see less skilled software engineers trying to do software, and the result is that the software isn’t commercial grade. The quality of the product isn’t good, it isn’t scaling. There are questions about whether the company can move the application to the cloud, about whether even more capabilities can now be added to it.” (As an aside, Smith says this change is also forcing new responsiblities on the executive IT management team – he says the CIO is dead, and what companies need are CITOs: the combination of a CIO and a CTO that understands the information/data supply chain and has the strong technology background needed to build strong systems).

Symphony Services will work with an organization to help them come up with the ideas and designs for new applications and systems, and then leverage its 4,000-strong software development team spread across India, China, Europe and the United States to build and implement the applications and systems.

Partnering with a application development outsourcer enables a company to focus not on software, but on its core strengths. That’s why Russound, a maker of audio accessories, engaged Symphony Services. “They never thought of themselves as a software company. They are a hardware company,” Smith told me.

When looking at applications and systems development outsourcers, companies need to be sure and consider innovation—and how it’s fostered and rewarded—both within their organizations and by the prospective providers. Another key question: how does the service provider ensure and measure availability and reliability of services.

And finally, as Smith stressed, be sure your provider is sitting in the same side of the table as you.