From my observation of several companies in Maritime, going Digital has meant to hire a lot of personnel in IT as software developers, DevOps, data analysts, scrum masters, etc. Sadly without any KPI measured by vessel or by the value created.

In my opinion, that approach is a waste of money and talent, unless the company’s leadership is crystal clear on the digital journey for the next 5-10 years, and it has the serious intention of becoming a digital company developing new products to the market. Even so, the risk of Product Management is very high for inexperienced companies and IT teams; I recommend a gradual approach of reskilling and changing the culture.

To my surprise, I don’t see leaders questioning or challenging these big IT Teams. Maybe we are burying our heads and prefer to keep ourselves busy with stuff. Let me put my finger on it, a team of 20+ can easily cost the company 1 M USD a year without achieving the desired outcome. Let alone that these kinds of teams require constant training to keep up with the latest technologies which can exceed the budget big time. Paradoxically, many leaders are keen to invest in human talent but not in the technology and projects needed for these people to perform atop.

So, what is the right approach then?

The right approach is the so-called Professionalization of IT where the company invests in talent in areas that create a competitive advantage or give control to the company. The rest is outsourced with real value partners that make the same service but faster, better, and cheaper.

Many companies spend hundreds of thousands on IT consulting services to get to the same conclusion. Thus, the company does not end up with a big and inefficient IT team.

But, when to buy and when to build?

Many people fall into the wrong debate of discussing which approach is better whether buying or building software. First of all, it’s worth mentioning that buy refers to getting a solution off the shelf, and build means to develop custom-built software, either in-house or by a third party.

The answer is very much aligned with the paragraph above. It depends on the strategy: where the company needs to invest to create an edge or to have better control of the operations. In other words, it depends on your competitive parity (CP) and competitive advantage (CA). As mentioned in previous articles, CP keeps you in business whereas CA gives you a leadership position in your segment by the actualization of the expected results.

For some companies, there is no special relevance in a particular system, and the offer in the market is good and mature. Therefore, these companies should go for an off-the-shelf solution. On the other hand, if a company, based on their business knowledge & experience, perceives value and business opportunity in a particular set of activities that could be done differently – either faster, with fewer people, more accurate, and/or automatic, among others – then this company should go for a custom-built solution. Needless to mention that a standard software, that any company in the market can buy, will not allow the company to stand out; that is the only reason to go for tailor-made solutions.

Once again, technology strategic decisions are more aligned with business goals than with Information Technology itself. The intention and aim must be defined first, then the technical part can flow afterward more smoothly and predictably.