Even the biggest and prettiest companies are getting hurt by increasing inflation and interest rates. This pushes companies to either go through emotionally painful process of restructuring or another alternative is to put their head in the bush and hope that the business problems aren’t real. Both examples exists.
Today, just few hours ago, TikTok announced that it is started global restructuring of their company in preparation for tougher economy in near months and years. Bluntly said, that means layoffs in the business. Read more at Wired.
An example for putting head in the bush and hoping for better comes from Australia, where Volt online-bank shut down. They didn’t manage to restructure their operations early/quickly enough to keep the company profitable and avoid the need for continuously seek for more funding. Volt news you can read from Reuters.
What does this all mean for software development?
In many tech companies, the competition over the years has been in recruiting best talent at any cost. Now times has changed. It’s time to evaluate what it the best cost-to-quality of a developer and what work is kept in-house, and what is outsourced to partners. This is a tough decision for many CTO’s because it is so nice to keep the people close and keep hiring the only the best once. But without analyzing the balance of what to keep in-house and what to buy from partners, CTO choses the path of putting his/her head in the bush and hide from the realities.
I have written earlier a guide to how to prepare for this and come out as winner. Here is a link to the blog. Key things now are:
- Stay optimistic. Remember that after the change, you are very likely to be a winner.
- Look at the numbers and accept what they show. What is your burn rate and what needs to happen for you to achieve profitability in next 6 months?
- Layoffs are coming. If you must do it, do it all at once, not in small pieces. Be realistic and invest heavily on the once who stay.
- Create a new strategy to maintain profitability.
- Prepare for positive outcomes once you’ve done the changes.
For software development teams this means that you should now fight to find good offshoring companies that have the required skills needed to maintain and further develop your solutions. Start immediately and work out together to find the parts of your solution that partner can handle and force your in-house teams focus in where the add the most value.
At Coredo, we have optimized our international delivery model since 2014 with the sole focus in delivering high quality custom software development services to companies who value quality, scalability and right cost-to-quality ratio. We are a valid option for companies to restructure their software development approach.
If this is interesting to you, ping me and let’s discuss more how we can work together.
Joona Puhakka
Founder of Coredo
Australia: +61 416 683 950
Finland: +358 50 533 9571
joona.puhakka@coredo.fi
