The next big challenge facing IT, as well as the recruitment sector, will be the creation of Virtual Application Development teams. 

This new way of sourcing skilled developers will either completely replace the current team structure as it has been nearly since the inception of the IT department, or significantly enhance the application development department and their leadership teams.

A few recent events occurred that identified three unsolved core issues regarding an imminent resource crisis hitting IT departments globally, which is:

1. How to recruit skilled application developers in a particular area when the equilibrium is broken and demand outweighs supply?
2. How to avoid limiting your department’s ability to quickly adapt and deliver solutions in emerging technologies?
3. How to ensure costs of service are not determined by a limited number of third parties but based on global market conditions?

A year or so ago, I spoke with a prominent leader working for a Silicon Valley business who stated they had issues recruiting skilled development resources in the vicinity of their business.  I was perplexed as to why they were facing such an issue, as this particular business has information pertaining to the majority of people actively looking for new opportunities in any area.  However, aside from a few days of bewilderment and eventually shaking my head in disbelief, I let it go.

Recently these questions came back to me when I was speaking with someone who was about to move from the UK to the US.  They are a recruiter and intended to continue a similar career path stateside.  Again the question of talented candidates in a particular area were brought up, as well as the heavy competition in the recruitment for qualified staff and the costs incurred by businesses to find them.  I was a bit more bullish in my approach this time and told the recruiter that I think the current model for recruiting application development staff through recruiters for individual companies is flawed and will start to go into decline.

The cost for IT departments to train technical staff on emerging technologies gets exponentially more expensive as time goes on due to the fact that the creation of new applications far outweigh the retirement of older systems, and businesses require IT to maintain legacy systems indefinitely.  Therefore, IT departments hedge their bets and commit their limited training budgets for particular emerging technologies.  This restricts their ability to adapt with the ever changing rate of technology if their assessment is flawed or an invention emerges that changes consumer behavior   Historically the only way for smaller businesses to conquer this limitation was to outsource all or part of their development work to a third party.  These third party outsourcing providers also recruit centrally located talent, but have considerable scale and flexibility to adapt and are normally based in cost efficient locations around the world.  None the less, their rates are increasing at a pace never seen before.  Even though the larger outsourcing providers are looking globally to built capability centers in order to reduce costs and improve services, supply and demand are equally effecting them.  Their running costs to supply skilled technical resources are increasing and to protect their margins, their pricing is also increasing.  This is coming to a turning point, for larger businesses with well established processes that can share their services, it is becoming more cost effective to restrict new technologies and re-insource than paying the outsourcing rates.  Achieving savings in an outsourced arrangement may require both sharing saving efficiencies and restrictions to the requirements which may adversely impact the solutions which adds an additional layer of complexity that businesses are normally unwilling to compromise on.  History tells us that this way of restructuring will end up in an endless loop of insource/outsource, very much in line with the centralisation verses decentralisation of large organisations if nothing is done to prevent it.

I went on to explain that I think the solution will be virtual application development teams.  Most businesses will no longer hire developers permanently for their business but on a temporary basis as the need arises.  Developers will become contract resources that work on either a fixed price bid or time and material basis for a particular job.

This will lead to a new role in IT, that of the Application Development Designer.  IT will need the recruitment companies’ help to groom this talent.  This highly skilled role will be responsible for splitting the application requirements into pieces that can be publicly distributed outside of the business without divulging IP or intent thus keeping safe companies’ innovation concepts.  This individual or their team, subject to scale, would also be responsible for reassembling the individual pieces coming in from people spread all over the world, into the complete application or service required by the business.

This solution is likely to solve many problems IT departments face such as speed to market, in addition to the three I listed above:

1. It overcomes the resource limitation hitting some talent restricted localities as the person providing the service could be located anywhere in the world and still meet the job requirements at the time.
2. It solves the training issues effecting businesses.  Developers would decide if they were going to stay with a particular technology or train themselves and stay up to date with current development trends and technologies.
3. It removes the middleman (third party outsourcing providers) and lets businesses work directly with the staff without the indirect labour costs.  If the price for a particular technology stack ceases to be cost effective, businesses can cease new development, treat that solution as run off and build future solutions on more cost effective technologies.

I feel that even though they exist on smaller scales, a potential way to deliver this solution would be to provide a bi-directional live e-auction site.  A site where developers bid for contracts and businesses offer development jobs.

Like eBay, development resources and suppliers join a site and pay a percentage of the awarded bid to the host for supplying the reverse auction, managing the ratings process, and providing the general terms and conditions.

• Developers can publicly advertise their services, ratings, skills and sector experience if relevant.
• Contracts for particular jobs are posted online by businesses or individuals in need of a service.
• Developers bid online in a reverse auction where questions and answers are public.  Their lowest offer in price, time to complete and potential solutions to meet requirements are listed and provided to the buyer.
• Contracts are then reviewed and awarded depending on the bidder’s solution, price, time, skills and ratings.
• Developers are provided a post completion review based on adherence to bid, speed, quality of delivery, communication and meeting defined requirements in an easy to understand rating system.
• Buyers are given a review on their quality of requirements, communication and timeliness to pay.

Businesses can browse developers’ profiles, read the individual reviews on the site, current rates and links to social media reviews.  Developers can review a business’ propensity to pay and coding specifications, and therefore price their services accordingly.

This are my thoughts as to where application development will go, do you agree?  I would be interested to know your thoughts and, as always, if there is something I can do to help your business or someone you know achieve their next challenge, please bear me in mind.