Dallas companies are struggling to expand tech projects
A near-zero percent unemployment rate for digital IT engineers creates a tough environment to build quality teams
As published in the Dallas Business Journal | bizjournals.com
By Patricia Connolly, CEO, SMC Squared
If you’re a CIO or CTO focused on digital innovation, you’re well aware that getting the engineering horsepower to leapfrog the competition is, in a word, “challenging.”
Increasingly, company leadership is under the gun to build technology teams for driving growth, digital capabilities, and innovation. The alternative is to risk becoming irrelevant with internal partners and lose market share. According to the latest data from the Texas Labor Market and Career Information Data Report, unemployment in the DFW metro is now at 3.0% across all job sectors. But zoom in on technology workers where CTOs are looking to expand their development teams and the number dips even further to all-time-low nearly zero percent.
CEOs and CIOs of DFW’s rapid growth companies, Fortune 1000, along with newcomers to the area, are fired up by a fierce need to develop competitive advantages, meet ever-changing customer demands, and accelerate technological advancements. They are turning to alternatives to overcome the strategic challenges of building and retaining engineering teams that mesh with existing corporate culture and processes.
One of these alternatives that is making a difference both nationally and locally is “rightsourcing.” Notable DFW companies are leveraging this hybrid model of “insourcing” and “outsourcing” to solve for today’s team-building expansion efforts. Rightsourcing is a cost-effective, self-sustaining, employee-centric model.
From PE-backed, high-growth firms to DFW’s largest Fortune 1000 powerhouses, this alternative speaks volumes to technology and business leaders focused on product and service delivery. And the cornerstone of righsourcing are global insourcing centers (GICs), an innovative approach that combines the “best of” traditional offshore contractors, outsourcing firms, and captive centers (a wholly-owned offshore facility) to fuel team expansion strategies.
GICs shine as compared to legacy under-performing outsourcing contracts and mitigate the high-cost and operating challenges of captive centers. Performing well with teams five to 500+ engineers, GICs are an effective way to:
- Attract talent to your company’s brand, values, mission, and product/service.
- Leverage global talent, while securing jobs at home.
- Reduce current year costs, often with savings of 40-60% as compared to traditional IT services.
- Reduce turnover costs and negative impacts on the organization (operational and IP risk).
How it works. Three phases of GIC development: Build, optimize, transition
GICs virtually eliminate the risk during the build-out phase by first attracting new team members that are recruited to fit specific client needs (versus pulled from a bench), then hired, trained, badged, and branded specifically for the U.S.-based company. This is your dedicated team, working as an extension of your HQ workforce, and focused on driving your objectives.
During the second phase, optimization, the company fully controls growth through organic expansion and new capability areas (for example: development, data analytics/engineering, RPA, digital). GIC team members are motivated through performance-based goals, rather than simply racking up billable hours. GICs in the optimization phase are focused on team retention, skills development, and maturing understanding of business-specific needs.
Finally, it may fit within your strategic growth to own your own global entity via a “transition phase,” but be sure to demand a zero-cost transfer path for you to operate the GIC directly.
To be clear, this new model builds a strong local/global mindset, versus the old offshore/onshore paradigm.
Companies with GICs accelerate cost savings
CFOs, in particular, are enamored with the transparency of leveraging “true India costs,” a predictable costing model, and the option to own a proven company asset.
With a stable and highly-skilled talent pool, companies are able to divert savings realized through the GIC approach to fund growth initiatives, expand digital and mobile platforms, offer new services, and innovate new product offerings.
“I really wanted an option where extra hands could jump-start our digital efforts, along with other projects whenever I wanted to bring innovative ideas and solutions for our customers,” said Rusty Kennington, chief information officer for national manufacturer and retailer, Corsicana Mattress Company.
“During the first year, the cost advantage of global insourcing was realized while improving both productivity and quality. Together, India and U.S. resources built and launched our new portal and mobile app that provides an industry-first set of tools that create a new, intuitive way for us to serve and help our retailer customers grow their businesses,” he said.
Is this model right for you? To explain what Gartner in 2019 called “disrupting the market with their GIC services,” Dallas-based Hunter Mueller from HMG Strategy and Patricia Connolly will be holding a webinar, “Expanding Your Engineering Teams to Brace for the Digital Tsunami” on Feb. 27 at 11 a.m. CST. Register here.
SMC² is based in the DFW Metroplex and provides global IT Services including the development of global insourcing centers with client-specific designs.
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