What is the role of software development in digital transformation?

When you see the words “software development” and “digital” in the same question, the answer seems obvious: They must be connected in some way. They are. But to make sense of this, we need to walk through the terms. We assume you already know what “software development” is, so we can skip that.

What is digital transformation?

This has many different meanings depending on who you ask, but in general, it means bringing a company/firm/organization up-to-date digitally so they can compete in modern business. Some think it just means having a better tech stack, apps, and tech options. That is a big part of it, but it also has to mean an internal culture change. If you switch to being a cloud company, for example, but all of your employees are still using paper documents and filing cabinets, then you are not actually a cloud company even if your senior leadership says you are. The culture and day-to-day actions have to change and become more digital and adaptable. That’s when a real “digital transformation” takes place. Salesforce has defined it this way, and CIO Magazine has called it “a necessary disruption.” (A disruption to the old ways of running a business.)

Now, how would software development help?

We are going to talk specifically about outsourced software development, as opposed to in-house (employees) software development. If you are trying to move towards a digital transformation in your business and you decide to outsource some of your software development, these are the common advantages:

• You solve the skills gap:When you hire internally, you tend to hire for specific needs that arise at specific times. That is how headcount is usually determined in a business. “This department needs this now.” But then what if your business model changes? Or what if, as part of a digital transformation, you want to do more with automation internally? Or more with the Internet of Things? You may not have experts in those areas because you didn’t hire them. But if you are working with an outsourced team, the outsourced partner tends to have expertise in multiple areas. This will speed up your digital transformation efforts.
• Data Privacy and Security controls:GDPR is a big deal, even though the fines process is getting into long legal entanglements. You need expertise in how to handle data and security to involve financial repercussions. Again, you could hire internally for this, but hiring internally can be a gamble. What if the person says they understand data and security but doesn’t? You might have just paid a certain amount to hire this person, and their first mistake will cost you 7-10x their salary. That’s not good. Go for data expertise. Almost every potential outsourcing partner will have a data expert (or 2-3) on staff.
• Gets you to your goals faster:Expertise in multiple areas. The talent you need. The security you need. A partner that becomes an extension of your team. It’s much easier to reach digital transformation goals using a third-party partner than dealing with the efforts internally, where emotions, psychology, politics, and lack of expertise in key areas can all derail your best efforts.

To find out more about how to select the best software development partner for your digital transformation, download our checklist here: