Most businesses have bold dreams and ambitions. Some even invest heavily in creating innovation colonies whose sole purpose is sit and dream to conjure up the next market wining product.
Coming up with innovative ideas, schemes and plans is the easy part. The hard part is executing and turning dreams into viable and profitable business realities.
A Small External Enterprise Development Team is Cheaper than Your Own
Time is money in the Digital Marketing & software development business. The race is on to get to market sooner, before someone else does and gazump and pip you to the post.
Most organizations, Small , Medium or Large, increase the likelihood of this with every delay. Moreover, the longer your in-house team takes to get you through the swamp, increases the likelihood that of project cost increases and ultimately failure!
In theory this should not be the case. Why bring in a team from outside, and pay more to support their corporate structure? Even going for a contract micro team ought not to make financial sense, because you may be inclined to think you have to fund their mark-up and their profit taking.
Common sense tells you that this is crazy. But, hold that thought for a minute. What would you say if a small external enterprise development team was actually cheaper?
To achieve that, they would have to work faster too.
A successful business is quick and nimble, with cash flow on tap for R & D.
The Case Against Having Your Own Internal Enterprise Development Team
Even if you were able to keep your own in-house team fully occupied – which is highly unlikely in the long-term – having your own digital talent pool works out expensive when you factor in the total cost of ownership.
Your difficulties begin with the hiring process, especially if you do not fully understand the project topic, and have to sub-contract the hiring task out to external recruitment agencies or even if you make use of your own internal recruitment teams.
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If you decide to attempt this yourself, your learning curve could push out the project completion date. Ultimately driven by lead time to get up to speed with new technologies to get to understand what it is exactly you’re looking for!
Whichever route you take, the following cost center’s are going to have a significant effect on your project budget.
- orientation training
- technical up-skilling
- travel expenses
Ultimately the greatest expense is TIME
A wrong recruitment decision would cost three times the new employee’s annual salary, and there is no sign of that changing.
That is not all, not all by far. There are additional costs to on-boarding staff
- you are going to have to buy them laptops
- You are going to need desks
- You are going to need chairs
- You are going to need office space
- You are going to need IT Infrastructure
- You are going to need additional IT Support
- You are going to need additional HR Management
- You are going to need additional Administrative Management
- You are going to need additional Facilities Management
A report conducted by the Oxford Economics revealed that on average it costs over £30K to replace a staff member
That’s not all!
If we really wanted to lay it on, we would add software / cloud costs, telephony, internet access, and ongoing technical training to the growing pile.
A quick scan of PayScale , will reveal that the median salary of a computer programmer in the UK is ₤34,750 per year and that is just the beginning. If you need a program manager for your computer software, their salary will be almost double that at £65,000 annually.
Finding the best structure for your enterprise development or innovation teams is extremely difficult
The Case for a Small External Enterprise Development Team
The business case for a small externally sourced enterprise development team revolves around the opportunity cost – or loss to put in bluntly – of hiring your own specialist staff for projects.
If you own a smaller business with up to 100 people, you are going to have to find work for idle digital fingers, after you roll out your in-house innovation project. If you do not, you head down the road towards owning a dysfunctional team lacking a core, shared objective to drive them forward.
Compared to this potential extravagance, hiring a small external enterprise development team on an as-needed basis makes far more sense. Using a good service provider as a ‘convenience store’ drives enterprise development costs down through the floor, relative to having your own permanent team.
Moreover, the major savings that arise are in your hands and free to deploy as opportunities arise.
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