Strategies to overcome the growth challenges of European ISVs

As the European economy rebounds from the depths of the financial crisis, we are witnessing a healthy revival of investment and entrepreneurial activity. With the advent of technology clusters and accelerators across major cities including Amsterdam, Berlin, London, Helsinki, and Stockholm, Europe is now home to a vibrant start-up ecosystem.

Some of the successsful technology start-ups (which are typically ISVs) are on the verge of transforming into scale-ups, and are looking across borders at global markets to fuel their growth. But, many of these companies are facing challenges that could constrain their growth, and which are common to the technology industry across most of western Europe.

Across national boundaries, these companies face similar challenges, and their next phase of growth will be possible only by overcoming them in time. Some of the commonly encountered challenges by European ISVs can be categorized as follows:

• • People/Skilled resources

• • Organizational structure

• • Process

• Technology expertise

Let’s briefly examine the impact of each of these challenges and strategies to overcome them:

Lack of skilled resources

Tight labor markets, and scarcity of technology talent in western economies, is perhaps the biggest challenge for ISVs. Lack of skilled resources can be very crippling, as it can lead to constrained development capacity, delayed execution of technology/product roadmap, longer time-to-market, and piled up technology debt etc. While, the long-term solution lies in structural reforms to enhance the supply of well-trained science and engineering graduates across western Europe, in the interim, ISVs have no recourse but to find people from other locations/geographies. The most cost-effective, and proven strategy to overcome this challenge is to have a strategic partnership with a mature offshore service provider, with proven capabilities of working with ISVs.

Organizational structure not aligned with product life cycle

It is a constant struggle for ISVs to strike the right balance between innovation, development, and stability, and choosing the appropriate organizational structure that fits their business as well as product lifecycle the best. Every product goes through a natural evolutionary lifecycle from inception, growth, and maturity to decline, and re-invention, and similarly the ISV will also have a parallel organizational lifecycle. For example, a typical start-up will be loosely organized with a small group of people multi-tasking, and fulfilling a variety of roles. While this may work for a start-up, as the ISV grows and aspires to be a scale-up, it will need a more well-defined structure, and process. The key to success is in ensuring that the lifecycle of the product and the organizational structure of the ISV are aligned at all times.

Lack of agile processes and automation

When you are working with a small group of people, you can build a great product even without a defined process. But as the ISV scales, and the number of people who are working on the product increases along with the complexity, the need for a well-structured process is paramount. An agile process with the workflow tools and automation will greatly enhance the predictability and quality of the product, and allow the ISV to scale up.

Gaps in technology expertise

Very often an ISV will have deep domain expertise and adequate technology skills to execute its roadmap. But with the rapid changes in the technology and business landscape, and the emergence of disruptive paradigms, no single entity will have all the skills to keep up pace. From time-to-time, most ISVs will need external, strategic expertise to help them overcome technology and engineering challenges and realize their product and business goals. In this era of core competencies and laser sharp focus, ISVs should not be averse in seeking expert guidance and assistance to deal with emerging technologies.

For the past decade, we at coMakeIT have helped numerous European ISVs deal with these challenges, and scale-up in the most cost-effective and timely manner. We have a strategic, and flexible engagement framework that puts the ISV in control, while we take care of the operational aspects. We have a niche solution framework, exclusively designed to help ISVs of all sizes, irrespective of their technology landscape and functional domain.

Many innovative ISVs from across Europe have reaped significant benefits from a strategic partnership with us. If you are an ISV, and the challenges cited above sound familiar, we can help you overcome them and pursue your growth path.

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