How to use Flexible Capacity for IT Development
An external IT team can allow companies to dynamically respond to changing market conditions and strategies.
As companies increasingly move their activities, transactions and sales to digital channels, the demand for high quality, professional IT development and services continues to grow.
This high demand for developers has inevitably led to steep prices for these highly sought-after talents, particularly in western countries.
As a result, hiring in-house IT teams that can allow a company to quickly evolve its IT architecture to meet changing market requirements can be prohibitively expensive.
However, growing companies often have a critical need for a dynamic IT approach if they are to succeed in highly competitive markets.
This can include development capacity for quickly building new sections to a website in order to respond to new market trends, creating new components to an app or expanding server capacity to deal with growing visitor numbers.
For companies with small margins and limited budgets, an internal IT team is probably not the answer to these questions. We’ve already written why IT Outsourcing to an external team is more cost-effective, efficient and rewarding for most companies seeking to realize development projects.
However, one frequently overlooked feature that professional IT outsourcing teams offer is that of flexible capacity – or more specifically, the ability to have an external development team or resources on call to quickly deal with IT tasks when and how they are required.
This can be a powerful capability, even if a company has its own internal development team – when the workload or demands become too intense, flexible capacity can act as a very useful source of reinforcement.
What is Flexible Capacity?
Broadly speaking, flexible capacity can refer to two types of external resources that can be used to respond to the need to scale or adjust IT assets.
The first involves having a pool of developers and software engineers that you can call on whenever you have a need to scale your IT assets up or down, or to adjust your IT infrastructure.
The second refers to having external IT hardware/software assets that can be used to extend your own capabilities when needed. We’ve already discussed this form of external flexibility in our article covering Cloud Scalability, and how it can be used to respond to fluctuating traffic and demands on your website or app.
In this article, we’ll be focusing on the human side of flexible capacity. That is, having an easily-accessible pool of human IT talent to turn to whenever your business may need it.
For many companies opting to outsource their software and IT needs, contracting an IT development company is done on a project-by-project basis.
However, for others that have more regular or urgent needs to scale – or simply want to be able to have the capacity as soon as it is required – flexible capacity allows them to do so with ease.
The arrangement can give them the peace of mind that they can rise and meet market challenges as soon as they emerge.
There are various different scenarios where Flexible Capacity can be highly useful for a company. These include:
- If your business only requires developers or engineers to work on limited tasks that arise periodically but unpredictably throughout your business cycle – you don’t need them permanently.
- Your business does not want or cannot hire full time developers – for startups with limited budgets, full time engineers can be prohibitively expensive.
- You need to have the ability to scale fast in order to capture market potential and not lose out to competitors.
How it works
There are several different models that companies can choose from when it comes to integrating flexible capacity into their business operations.
The first method is to contract an IT service company to work on a specific IT project. In this scenario, the speed at which the IT development company will be able to respond to your IT project will depend on its own capacity, and how busy it is with ongoing projects.
For companies that have a frequent need for work on their IT assets, hiring a company on a project-by-project basis is probably not the most efficient solution, as it inevitably involves:
- Drafting new contracts for each project
- Being uncertain on whether the chosen IT development company will be able to respond fast enough
- Larger costs in the long run, as the IT development providers will not be able to factor in the long-term relationship when providing quotes for each project.
The second, most effective way to attain real flexibility is to establish an ongoing contractual relationship with an IT development provider.
Similar to a “retainer”, this form of arrangement can establish certain rules that will govern an ongoing relationship between a client company and the development provider. This creation of an “open channel” can then allow for expedited work on IT projects, as and when the need for them arises.
Let’s take the scenario of an e-commerce company that is expanding its operations to several new markets.
In the initial period, the company will want to build the IT infrastructure for the new country-specific components of the website.
However, once these sections are built, they will not be static. While the company’s own internal employees will be able to manage and adapt the e-commerce product catalogue as required, the company also plans on launching marketing campaigns and special discount days that differ across different markets.
In these types of scenarios, having a dedicated external IT team that is ready to take the necessary steps to adjust each e-commerce component accordingly will be far more effective and efficient. At the same time, they will also be able to expand the site’s capacity for handling increased volumes.
A pre-established relationship can give a client a “direct line” to a development company, who can then simply track and bill for time worked each month. This will be much more efficient than having to re-contract the same provider again, or even more problematically, to hire a different company.
Additionally, having an IT development partner that is always on call through a flexible capacity arrangement can give companies the added benefit of having a partner to discuss potential IT projects with in greater detail, and on a regular basis.
In these scenarios, the IT development partner will be able to dedicate greater time and attention to the client, and will have an interest in investing the time and energy into research for potential IT projects that can elevate the technical capacity and offerings of the client.
Are you looking for a professional and dedicated IT development company that can be a partner in your flexible capacity strategy? Get in touch and we’ll be happy to discuss the different types of long-term arrangements we can establish to optimize how your company engages with IT and software.