When CaaS is More Suitable than Outsourcing
The Strengths and Pitfalls of Outsourcing
Outsourcing of software development is becoming more commonplace with businesses trying to build their internal digital infrastructure quickly enough to meet market trends. When deployed skillfully, outsourcing can be an effective way for business owners to improve efficiencies and boost their company’s bottom line. Through outsourcing, work can be done by contractual specialists to speed up the delivery process without increasing the long-term burdens of operating and overhead costs. You could delegate projects, which you have little experience or knowledge in, to a reliable vendor to complete expertly instead of spending twice the time and budget trying to figure things out. What could be better?
However, there are plenty of outsourcing horror stories, ranging from missed deadlines to poor work quality. While you may mitigate some potential risks by outsourcing, an overconfidence in outsourcing can lead to loss of profits and even business failure. This is because you lose some control over how outsourced tasks are being monitored and performed. Failure to provide guidance and define expectations, due to an eagerness to offload work, can lead to poor estimation of costs and schedules. The situation worsens when you lack the knowledge to properly assess the outsourced work, leading to your business being ‘held hostage’ by the outsourcing company whenever fixes or changes are required.
Instead of relying on outsourcing, consider engaging a CTO as a Service (CaaS) to satisfy your needs for digital transformation.
What is CaaS?
CTO as a Service (CaaS) is gaining popularity in many industries globally to improve their business processes. To explain, CTO means Chief Technical Officer, whose job responsibility is to lead the technical side of an organisation. The CTO usually has to plan the requirements of technical developments like digital infrastructure. They analyse the skill sets needed, hire the correct developers, identify short term and long term goals, and weigh the project benefits against potential financial risks to achieve the business objectives.
CaaS is when you hire a part-time CTO for your business. Such a service can be especially useful for SMEs and startups who have no strict requirements for a permanent full-time CTO. You may only need one-time consultations on any design and development issues. Or you want someone to help develop, expand and troubleshoot your company’s technical capabilities for a new initiative. CaaS serves as a cost-effective option to gain the assistance of a technical consultant to look into your technology-driven challenges while adhering to the vision and roadmap of your business model.
Simply put, CaaS is a third-party consultant and partner who can offer expert opinions about best practices while being periodically involved in your technical design and development processes.
Who Needs CaaS?
Why might CaaS be the best option for you? Here are some examples of when CaaS can be more suitable for your business than outsourcing:
You do not know who to approach to technically realise your ideas.
Outsourcing companies specialise in specific fields and technologies. You can have an excellent product idea, but you do not understand how to develop it. This means you may not know how to correctly search the outsourcing market to find your ideal vendor. Time and resources are wasted in meeting the wrong vendors while you become confused over which vendor’s perspective is valid. Potentially, your great idea may be changed into a bad one.
You want impartial, open-minded evaluation of technologies.
Outsourcing companies tend to be biased towards their expertise to maximise profits. Without a wide breadth of experience, you may not be sure whether the technology proposed by them is the best option or if it can be improved. You will not know whether the advice you received surrounding various technical issues is objective or prejudiced. This can put you at risk of ignoring blindspots and becoming overly swayed by the whims of a vendor.
Your scope of work has yet to be defined in detail.
Outsourcing companies require clear scope of work before starting. Without a strong technical background, you are unable to accurately estimate costs and feasibility. You are unable to formulate the necessary structure and instructions to communicate with outsourcing vendors. You lack the knowledge to measure performance and evaluate deliverables. This leads to misunderstandings and frustrations when expectations are misaligned.
You require an on-demand CTO for ad-hoc decision-making.
Outsourcing companies prefer condensed, scheduled engagements. It is unlikely for a vendor to work with you periodically while waiting for instructions indefinitely. If you are at an exploratory stage, having a CaaS allows you to pay only for the services that your company currently needs, giving you more flexibility and cost-efficiency. CaaS can also work with you to create roadmaps, to perform project audits and to negotiate with stakeholders.
The Functions of CaaS at Different Stages
CaaS is like hiring a technical expert on a need-to-have basis. Let us see how it all works at different stages of your project development.
Project Goals and Budget Estimations
An essential task for CaaS in the early stages of project development is preparing goals. CaaS draws up a business plan while taking into context the specificity of your business, technical trends, your competitors, your target audience and your value propositions. CaaS can also recommend the appropriate budget for your project based on the capabilities, ambitions and business risks of your company.
Software Requirements and Strategies
To figure out the necessary user stories and tasks for your project to start, CaaS can help in listing and describing all the critical requirements for your product including its design and architecture. This can take the form of a functional specification document or flowchart diagram. CaaS can also assist in searching the right technology stack for your product. The expertise of a CaaS can provide clear, organised directions for the development of your minimum viable product (MVP).
Project Management and DevOps
CaaS can be involved in your sprint-to-sprint project planning. CaaS can aid in prioritising tasks and calculating a clear plan of action for your developers and designers. This makes it easier for you to evaluate work progress, identify critical threats to your project, and efficiently allocate project resources. As part of management, CaaS can also be part of your hiring process by devising the relevant criteria and conducting in-depth interviews to acquire a strong and talented team.
Development and Testing
CaaS can supervise developers and check how their work meets your project requirements. CaaS can be involved in prototyping, system design creation, wireframes creation, UI/UX design, algorithm development and debugging. To conduct proper quality assurance testing in order to minimise product defects, CaaS can also define testing objectives, choose testing methods, find representative users, create task scenarios, replicate testing environments and analyse the results.
Pitching and Presentations
Stakeholders make decisions based on the quality of your team and your presentation. CaaS can improve your pitch by predicting their points of attention and providing the answers to their technical questions. CaaS can also communicate your technical milestones with confidence and react to any impromptu queries about your implementation timeline. This creates a capable and positive impression of your team which can further build trusting relationships with stakeholders.
Considerations about CaaS
Some people are hesitant to adopt CaaS because they worry about commitment and loyalty. They view CaaS as a person who comes in for a short period, does a basic evaluation and review, gets paid, and leaves. They prefer someone who is immersed in their company’s values and stays with the project from start to completion. This is a valid concern and should form part of your considerations when deciding whether to hire a CaaS.
The core question to ask yourself is what are your technical requirements at your current stage of business. Most startups and SMEs do not have the resources or workload to justify an experienced full-time CTO. Take the time to review what your company needs and what roles your CTO will be fulfilling. Ask yourself how much you are willing to pay for a technical specialist to make sure your technological needs are met and how much their workload will be on a daily basis.
With all of the above in mind, CaaS is a reliable interim solution that will cover most of your digital transformation needs before you are ready to scale up and hire a full-time CTO. All businesses are not equal, so CaaS offers you a great way to strengthen your foresight and to avoid technology-related pitfalls of your project. You stand to gain a much clearer picture of your idea from someone with real-life experience in the technological space who can give you an unbiased view of your service or product as a whole.
About the Author: Reefic Team