The last three years brought an accelerated rhythm of change, and significant changes that are yet to be fully assimilated in terms of business impact. High stakes decision making, a process much dreaded for its energy and nerve consuming profile, is becoming more ubiquitous in our lives. Aspects like swiftness, reversibility, information accuracy and delegation become mandatory for thriving as a professional business.
There is a Russian painting, Knight at the Crossroads, of a chivalrous warrior caught at a crossroads in his journey. In front of him there’s an inscribed stone that warns he’s going to lose his life if he goes to the left, and his horse if he goes to the right.
Obviously, losing the horse leaves him with no future as a knight, while avoiding making a decision is probably going to result in a dire ending for both knight and horse, but that is left to the audience to guess.
As a software development agency from the emerging Europe space, this is how the economic and technological context presents itself.
Traditionally, emerging Europe’s value proposition when it comes to software services was mostly built around reducing operational costs and increasing productivity for clients. For a good while, the liberal theory of economic interdependence reaped benefits for both sides, up to the point when demand-offer dynamics lead to increased costs for services, with productivity having to increase in order to continue to make economic sense.
And this is where things get complicated, since it’s easier to compete on costs, whereas productivity was mainly focused at task execution level. The consequence is that the recruitment and delivery models built across the years are now being disrupted.
Decades of agile software development where value discovery and product shaping were part of the internal customer process with delegated task execution have left most service providers at risk of commoditisation or forced consolidation. Add to this a perfect storm of: economic recession risks in traditional customer markets, AI disruption, doubling of offshoring markets and capacities; and as a knight in the shinning armour of technology prowess you find yourself in the position of having to choose your path forward.
Staying with the knight’s story, you could assimilate the left road as one of doubling down on increased service efficiency. Replacing a pizza size team of developers with one AI powered developer path is the current expectation for most CTOs of newly minted start-ups in the age of AI.
The right could be one of own product development that leverages the insights and knowledge accumulated from cross projects experiences. As exciting as it sounds, facing the markets directly is not without challenges, especially since your service provider positioning did not expose you to direct observations about users, market forces and dynamics. The value assumptions typically done and paid by the customers before, now have to be owned and funded by your, hopefully still available, service development margins.
There is value in change, and service providers have to choose where to position themselves in the new age of constant change and permacrisis. For emerging Europe’s software development agencies a new dawn is at the horizon, one with the threat of having their lunch eaten by citizen development platforms or low cost offshoring alternatives, and one where they have more opportunities to capital and direct market opportunities—as soon as this new crisis is more or less over.
This content has been produced in collaboration with a partner organisation through our Global Visibility Programme. Our programme helps companies boost their digital presence and strengthen the thought leadership of their experts. Find out more here.
Add Comment