With the global nature of the smartphone business, there are many international companies touting for your app development business, as well as numerous small startups and “one man bands”. With smartphones and tablets themselves being a “disruptive technology” in terms of information delivery, could they also represent a disruption in how and where software development is sourced?
A recent article in The Australian Financial Review, by Brian Corrigan on the 21st August 2012, titled “Be wary of foreign app builders” relates two stories of Australian businesses getting apps developed overseas for substantially less than was on offer in Australia. In both cases, one in the US and one in India, the projects totally failed to deliver working apps and were cancelled, with loss of monies paid – in one case the total budget was prepaid and lost. In both cases, the Australian business owners then commissioned local developers to build the apps, at three to five times the overseas budgets, and were much happier with the outcome.
One of the main reasons given for the failure of the overseas contracts was the difficulty of managing projects remotely. Although Skype was used regularly, the lack of face to face time – being able to “physically rock up at an office” was seen as a significant limitation.
I don’t believe that offshore development companies will take an increasing share of Australian app development work. The off shoring of web development projects went through a peak some years ago but I know of a number of clients who anecdotally had bad experiences and have returned to local developers. I’m not saying that off shoring will disappear – rather that there may be some sizes and types of projects for which it may be effective but there are many others for which it isn’t.
I believe that it will be similar for mobile app development – there will always be some level of projects developed off shore but after an initial period of trying this model, only some types of projects will be found to suit this approach.
It may be argued that this view does not match the reality we see with on line sales, where large international companies like Amazon are taking significant market share off local booksellers. If app development is increasingly a commodity, why would it not be subject to the same outcome? I fundamentally believe however that in most cases, software development cannot be considered a commodity – rather it is a combination of a complex technical task and a creative task. I know of very few examples where professional services are being successfully “commodified” and sold online.
I also believe that off shore development companies have a different business model to most local developers. Their model is based on low cost, high turnover, with limited allowance for relationship development. Since they’re competing in a huge international marketplace, if projects don’t go well, they can afford to abandon the project and the client – repeat work is less important to them.
For local developers, relationship and repeat work is critical. They’re playing in a much smaller market and failed or abandoned projects and clients will damage their reputation and ultimately destroy their business. They have to work harder to make projects successful.
Whatever happens, significant software development will continue to be hard work for both the client and the vendor. It will require high levels of communication and the development of a shared understanding of the desired outcomes. In particular, for smaller apps which typically don’t have detailed specification documents written for them, I believe it will be a business best done with a local developer and face to face.