Tuesday, September 22nd 2020
  • Own software team, external partner, or both?

    Digitalization is forcing many businesses to “deal” with digital services and software development. Often, companies do not have the needed competence, and they are faced with the dilemma to either start building their own software team or to hire an external partner.


No one from the outside can tell what the right approach for your company is. However, considering Your business strategy, Your budget and Your time horizon, will bring you closer to an answer.

If it were only about business strategy, the right move when starting development of a digital service or an application, would be to build a complete team internally. It would make you less vulnerable and it would increase your company’s value.

However, it is usually not the only dimension to consider. Very often, your budget and your time horizon set the constraints.

Following will guide you in finding the right approach for your business:

1. Your strategy – what type of solution do you need?

2. Your budget – can you afford to employ software professionals?

3. Your time horizon – when do you have to launch to the market?

4. Conclusion

1. Your strategy – what type of solution do you need?

Will the solution you need require a one-time or a continuous development effort?

By one-time development effort (even though all software require follow-up and maintenance), we mean for example: a corporate web site, a basic e-commerce solution, applications for internal use, prototyping of an app idea, a digital experience for a trade fair etc.

By a continuous development effort, we mean for example: a digital service (web/mobile) made for your end customers, an advanced e-commerce site, an application with large data handling needs, a hardware device accompanied by an app/service etc.

If the solution you need belong to the latter category, then you should strive to secure as much as possible of the required competence internally. Let your network and your HR department find some senior persons with proven track record, to build the team around.

2. Your budget – can you afford to recruit software professionals?

“Continuous” development of an application/service is not cheap. Even if your strategy confirms that continuous development is what you need – the question is if you can afford to employ the professionals required? This is in particular difficult for the startups that base their innovation on hardware. Connecting devices to the internet (IoT) and delivering the service via mobile/web apps, is often a financial burden that owners/investors cannot bear.

For simplicity, assume the average cost for a senior software professional in Sweden to be 1 MSEK/year. How many persons can you afford to employ, given your budget then?

3. Your time horizon – when do you have to launch to the market?

Do not underestimate the time it takes to recruit the right people. The best professionals are always occupied, and they are not easy to attract. Do not be surprised if it takes more than one year to get a well-functioning software team in place. Even with a generous budget. What about competition by the time you are ready? When is your solution supposed to reach the market?

4. Conclusion

For many companies it is difficult to establish an own software team. A possible middle way is then to employ key people with digital/software competence. And to find the right external partner that will work in close collaboration with your key people.

“The key people” can be a single person, such as your Tech project lead or your CTO. But it can also be a team that can cover several aspects of product development such as: product management, UX design, analytics, application-, web development and data handling.

“The right external partner” is a company that will, in a dialog with you, define what to complement your team with. Exactly what Avico is capable of doing.