Internal Software Development Team: Should You Have One?
Should Your Business Build an Internal Software Development Team?
The software marketplace has expanded and evolved so that most organizations rely on commercially available programs, toolkits, applications, and platforms. Most companies do not have an internal software development team because commercially available software meets their needs. However, building an internal software development team is a valuable pursuit if you have a reason to develop software internally.
Those offering software as a product and those who require custom software for a unique business model are the most likely to build an onboard development team for these purposes. The question is: Should your business have an internal software development team to produce and support your much-needed custom solutions?
Who Needs an Internal Software Development Team?
The first question is why you would need an internal development team. We can start by examining the types of businesses that typically have development teams and why these teams are important to their business model.
Businesses Build Software Teams Because:
They provide software as a product
They intend to commercialize an internal tool
They have disconnected core business systems that require custom middleware.
Standard industry tools do not meet their software needs
Their stack cannot be completed using only commercial software
They have discovered major bottlenecks regarding software
They need a custom internal tool or platform to achieve a unique business model
Providing Software or Platform Services
Adobe, CorelDraw, and VectorWorks are all design suites that offer licensed, downloaded, and used software by paying clients. Each specializes in creating its software, and part of its business model is regular releases of updates, patches, expansions, or new versions. Businesses that sell software usually have an internal development team.
Naturally, brands that produce software as a product must have a development team. In most cases, the development team is in-house because they work year-round to support the current version of the subsequent updates. Those that provide a software suite may also have multiple development teams working on each product.
Intent to Commercialize and Internal Tool
One interesting variation of the software product is the intent to patent, sell, support, and upgrade an internal tool. This can happen when a team develops internal tools based on evolving industry and operational needs but realizes they have an opportunity to sell something valuable to industry colleagues who face similar demands.
For example, this is how Steamworks evolved from an internally built platform for a multi-game package release to an international game platform. If your company is ready to transition to providing a piece of software that you want custom-made, internally developing that software to provide support and continual updates for your future B2B customers may be the right decision.
Hosting a Software Platform
Some brands provide an entire software environment or platform, a SaaS (Software as a Service) platform. For example, GitHub, Azure and AWS, and Squarespace are not just inviting customers to use custom app features; they are creating a place where other businesses connect their tech stacks and operational procedures. In this case, the software environment must be top-notch. Periodic updates and break-fix repairs are not up to the standards or needs of the modern B2B software environment.
Depending on the complexity of the included features in the platform, many teams of internal software developers may be necessary. For platform providers, an on-staff development team is non-optional. These brands require internal developers to constantly analyze and repair potential problems, build new marketplace APIs, and prepare the next security update.
Custom Middleware
A development team for internal middleware may be necessary to connect core business systems because off-the-shelf solutions may not meet the specific needs and requirements of the organization. A custom solution is tailored to integrate seamlessly with existing systems, streamline processes and improve overall efficiency. Additionally, a development team can provide ongoing support and maintenance for the middleware, ensuring it remains up-to-date and continues to meet the evolving needs of the business. Ultimately, having a custom middleware solution can lead to significant cost savings and increased productivity for the organization.
Industry Standard Software Does Not Meet Your Needs
Not every business fits into a perfect enterprise management cookie-cutter. Your business may have a unique business model or operational style, meaning the standard business software tools must meet your needs. In some cases, this indicates software that needs the complexity or calculation power to handle the operational data you are handling. In others, you may need more computing capacity for the number of orders or data you need to process.
There are hundreds of ways that industry software needs to be revised. You may need to handle a unique operation that a typical ERP cannot handle. Your CRM may have some informational values you need to track details about your clients. Or you tried the tools designed for your industry and found them lacking.
When this happens, a business has every reason to substitute or augment industry standard tools for a custom software solution. But you don't necessarily need to build and maintain it internally if you don't plan to sell the custom software as a product.
Your Preferred Software Stack is Incompatible
One of the great things about modern IT is the ability to stack programs through APIs and platforms to create a unique toolkit for your business model. Some industry-specific programs do not have a data structure that interfaces with your ERP.
Your two favorite programs might be from rival brands that seem designed not to interface, or you may realize that two favorite tools use entirely different file types. Whether your preferred tools were hand-picked by the IT team or each team picked their ideal tool and IT was left with the task of meshing, this type of setback is frustrating and poses its potential solution.
Custom software modeled after your preferred compatible pieces or a custom API that overcomes these hurdles can allow you to create the ideal stack without these unnecessary setbacks. When you already know the software you want to use, reinventing the wheel inside your team is often unnecessary. In this case, the development team may be the ideal way to get your tools working together and your workflow back online.
Commercial Software Creates Internal Bottlenecks
A CIO watching internal productivity may have all the necessary tools, but they must be fixed. Only some stacks that do the job are ideal. Not every all-in-one ERP, platform, or suite fulfills your software needs. You may realize that one of the tools in your toolkit is too primitive for the operations your team is trying to use it for. You may notice that one program in your stack - while possessing the necessary tools - operates drastically slower than the others, creating a bottleneck in the workflow.
When the tools work but don't work well enough, CIOs often start thinking about custom software or consider building a software development team.
Your Business Model Requires Unique Internal Tools
Lastly, some teams find that while their product is independent of unique software, the internal operations of their business model may be. Some businesses do something special or have devised a way to innovate the industry standard procedure in a way that commercial software does not support. Perhaps you want to implement a custom solution for your fleet, or franchising has led to a new and complex need for integrated systems. You may have built the perfect tech stack, but one gap available software cannot fill.
When your business model requires internal tools you can't find in commercial software, it's time to go custom. However, once the software does what you need it to, the question is whether you will need continuous development or treat the software as a piece of equipment with the occasional update and tune-up from an outsourced team of experts.
A Matter of Continuous Development
For many businesses, the line is not always clear. Only some business models draw an apparent division between the tools you need to develop internally and those your business would benefit more from outsourcing. If you want an internal toolkit, should you develop it internally to have complete control and to tweak the features all the time? Or would you be happier working with an outsourced studio to create the perfect custom software once without worrying about building an internal development team?
These questions should be carefully considered alongside your budget and expectations for the resulting custom software's use.
Continuous Development vs. Outsourced Updates
The development cycle is the most significant difference between building an internal development team and outsourcing custom software. When you have a deadline to meet, you can’t afford delays. An outsourcing agency saves you time, and many companies provide expedited development services at reasonable surged costs. Your development team will expect to either take on new custom projects or to continuously seek ways to update and improve the custom software they were formed to build.
On the other hand, outsourcing custom software typically involves collaboration between IT and the development partner until the solution is complete. You can use the software as a complete and independently installed product. Updates to the software will be at your request, initiating a new round of development from your development partner to provide new features or versions. At the same time, a maintenance project can be used for routine support. Once the software is complete, your team will have the custom tools they need to thrive, and development does not interrupt your workflow.
Planning for Continuous Development
Continuous development is unique to software engineering and development teams, typically reserved for companies whose brand reputation is founded on a software project's quality and competitive edge. Agile development, where short-cycle updates provide constant minor improvements based on analytics or changing trends, can be very powerful when continuous development is the right approach to your business model.
If your customer experience requires a dynamic and constantly improving experience or you are always working on the next version update for your proprietary software, plan for continuous development. Keep a team on staff who can take apart your software, put it back together, and improve it every year.
Outsourcing Custom Software, Support, and the Update Cycle
Suppose the software is correct the first time with all the features, functionality, and smooth operation needed for your purposes. In that case, you don't need an on-staff agile development team making little changes every month. Like many industry solutions, your team might prefer that the software be set in stone so everyone can learn the new system to streamline operations. However, most companies that need a custom solution would prefer to use that solution like a tool in their toolbox once it is complete.
Your solution will eventually need to be updated to keep up with the latest operations and trends, and you might need support to handle the occasional malfunction. In this case, partnering with an outsourced custom software team and scheduling a periodic update is far more efficient, cost-effective, and potentially satisfying than staffing an entirely internal development team. Your development partner will happily make itself available through a support contract and an update-cycle project whenever needed.
Partnering with a Custom Software Team for Temporary Development
What is the middle road? Many CIOs like the idea of saving money and commitment by outsourcing the custom software solutions they need but dislike "farming out" the company's most specific and unique requirements to an unknown team. This is where a software development partnership comes into the plan.
Custom software development should be done through collaboration, working closely with the professionals who design and will use the software so that every design element provides better solutions for the intended use cases. Some software studios do more than just make bespoke solutions on speculation; they temporarily join the team. When a development partner sends people to work closely with your IT team, they become as effective as an internal hire but without the long-term obligation to provide a total workload of development when the project is finished.
These specialists get to know your business, its pain points, and its unique need for a software solution. These teams can augment your current teams and form a well-meshed team between your IT, any on-staff developers, and your hired software engineers. The result is as precise a solution as you require, entirely up to your standards and built within your company's context, but without long-term developer hires.
The Need for Internal Development Vs. Working With a Partner
When your company needs tools unavailable through commercial software, you start thinking about how to build a software development team. But do you need an internal development team, or is it better to work with a partner?
This is an important question for any business leader considering a company's need for custom software. Many businesses find that the current commercially available software meets their needs. You may have a unique business model, but EMS/ERP software only covers some of your needs. Additionally, your team may run into routine limitations and bottlenecks using available tools. You may even have stack incompatibilities, and the two tools you would like to use need an API or simply will not integrate.
Custom software solutions only sometimes need to be developed internally if maintenance and updates will not fill the workload of a developer or a development team. In these cases, you may not require an entire on-staff software engineering team but rather the ability to work with a development partner who will help you maintain it. A partner's support and occasional responsive update are often more efficient and cost-effective for similar results.
The Benefits of Working with a Partner
The natural response to needing custom software is to assemble an internal team to build it. But if you do not require or expect continuous development, there are many benefits to working with a software development partner instead.
Access to a Full Team of Experts
When IT professionals and software engineers are in short supply, building an entire team with the right mix of capabilities and specialties to complete your ideal custom software can be a big task. However, a software development company already has this team assembled and ready to deploy. Whether you need a one-month or two-year project, there is no need to fight the “War for Talent” or worry about the complexities of hiring for technical specialties when there is not already a similar specialist on your team to do the hiring.
Development, Updates, and Support in One Package
Custom software can be a "set it and forget it" solution, but it doesn't have to be. Many professional teams offer a full-service approach to development with the understanding that your solution will need updates and support to continue providing the ideal performance and functionality that your team requires. These matters are pre-arranged so you know what to expect from development, the update cycle, and any support services you may desire.
No Long-Term Hiring or Workload Commitment
Hiring an entire permanent development team may be optional when you need just one custom software solution. It is important to consider your expected workload and whether it will be maintained after the project is complete. Long-term development may hire a team that understands the positions last until the software is complete, leading to hiring and then laying off developers. This is far more demanding than building a custom software development contract with a studio that can tailor their hours to your needs without indefinite long-term commitments.
Use Your Software as a Tool, Not a Product
If your completed solution does not need continuous maintenance, this is a benefit you can enjoy through streamlined operations. Your solution can become a reliable and unchanging tool in your toolkit, making work faster and easier while providing more capabilities without worrying about the effort of treating the solution like a commercially available product that must be internally produced and maintained.
Bang For Your Buck
Lastly, custom development is often more affordable than an internal development team. Because a studio splits its efforts between multiple clients, you are also not responsible for the payroll of a team of software experts. Instead, your costs are explicitly limited to the hours of development that you need.
Does Your Business Need Custom Software Development?
If your company requires custom software, what is the right way to build it? If you intend to sell the result as a product, platform, or service, or if you predict the need for a continuous development cycle, then building an internal development team may be your best move.
However, if you seek to develop the right tool for your needs where commercial software has fallen short, there's no need to take on the entire development burden to create it. Working with a partner can give you the perfect piece of software to complete your tech stack and workflow.
To learn more about custom software solutions built as a team, tailored precisely to your business needs, schedule a discovery call with Mach One Digital.