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Big or Small? Provider Size in Custom Software Development

When choosing a software development and testing services provider, you need to rely on specific and measurable parameters. Potential partner size is most likely crucial for your decision, which often turns out to be more challenging than expected. You need to consider your own company’s size and annual outsourcing budget. However, the key metric that we recommend you focus on is the scope of your project. Is it a company-wide challenge covering several departments and requiring the efforts of at least a dozen engineers? Or is it a very specific niche task for a small but highly trained team of a few experts in a particular business area? Bigger is not always better, and we will explain why below.

Large-Scale Challenges

Company-wide projects naturally make you look for a big provider. The range of services software outsourcing giants can offer and the resources they can allocate to the project are often broader and more diverse than those of smaller companies. Thousands of engineers available in dozens of development centers worldwide is definitely an advantage. It just seems easier and more convenient to entrust the whole range of tasks to a single provider. If you are not afraid of the red tape that usually reigns in large corporations, and if your main goal is to delegate the task to professionals without being involved in the process, then this is the way to go.

However, you cannot be sure that a large vendor will perform a specific task better than or at least as well as a smaller provider specializing in a particular area of expertise. Besides, niche companies often strive to gain and maintain a reputation in the field and are ready to do their best, introducing a more flexible approach to processes, reporting, development, and testing practices, while Big IT tend to commit to their initially established processes and figures. Well, let’s face it, ramping up a project of 50 engineers in a matter of weeks when the potential provider’s staff does not exceed 300 employees might not be a wise idea. Your potential partner might not be able to scale up quickly or have enough resources to deal with challenging situations. Mid-size companies of 500–1000 employees can also be the perfect fit when the customer wants to be involved in processes and communications.

But are they always cheaper? Well, the answer is both “yes” and “no.” Mid-size providers like Auriga can be more efficient than major market leaders since they are not overcrowded with managers and service personnel, thus saving you some money, which you can allocate to product development. Yes, big companies usually have more flexibility to offer discounts, but with mid-size companies, you can directly choose to pay only for what you need. Besides, even if the cost of the services seems the same, the level of service varies. While large companies will probably treat your task as part of their routine unless you are a key client, smaller vendors will likely pay more attention to you simply because they have fewer ongoing projects and giant customers. That means that while your company may be an outsider for a large corporation, you can be one of a mid-size or small provider’s main clients and get more attention.

What’s more, niche companies’ top managers usually have recent or relatively recent engineering backgrounds. Going from a junior developer to a CXO position is even possible! Vyacheslav Vanyulin, Auriga’s CEO, started as an embedded engineer 20+ years ago and for the last several years has been responsible for Auriga’s prosperity. He told us that every decision he makes at the corporate level goes beyond purely administrative concerns and is made with the commitment to the best client experience and with the consideration of the importance of the client–engineer relationship to the project.

Getting Niche Tasks Done

Smaller providers have fewer resources, and they certainly cannot invest in R&D as much as their bigger counterparts do. Nevertheless, smaller providers can offer you the best quality service for custom, specialized, and niche tasks, given tight deadlines and limited budgets.

Another valid point is that mid-size and small providers focus on building strategic partnerships rather than just outsourcing. With niche providers, you are likely to take your relationship to the next level and get a strategic partner that will care about your business instead of the vendor, which remains a stranger to its customer chasing deals. Partners are usually called upon when their clients need support – whether they experience a problem or need feedback on a potential new product they are considering. Partners earn the respect of their clients by sharing the same values and going far and beyond the contract obligations, growing with the clients and building long-lasting relationships. And that’s what smaller companies strive to accomplish.

Diversifying Your Provider Mix

Working with smaller providers also has an unexpected benefit since niche vendors usually do not aim at pushing larger ones out of a customer’s project. On the contrary, they often act as a beneficial addition to your provider mix, operating shoulder-to-shoulder with existing counterparts and focusing on either routine or specific issues.

Provider mix diversification helps you encourage healthy competition among your providers and motivate them to perform at a higher level in terms of both hard and soft skills. Diversification by size, in particular, allows you to solve both global and local challenges time-efficiently and cost-effectively. You only have to figure out how to distribute your tasks and projects wisely to get the most from your cooperation with different providers.

Size Matters

Among other factors, partner size is a crucial parameter that can undermine the success of the entire project if not taken into account. A company’s size determines its approach to planning and decision making, communicating and negotiating, staffing and project management, the building of customer relationships, and the provision of flexible and tailored services. That’s right, it is the ultimate determinant of outsourcing success.

When making a choice, try not to fall into the stereotypes trap. Remember, there is no magic formula; just try to think carefully before you choose. If you want to delve more deeply into the topic, check out our article “Software Development Outsourcing: Size Matters” by Yuri Kirkel, Executive Vice President at Auriga.

You may already have a trusted software development partner, but there are always tasks that Auriga can do better and faster due to its optimal size, among other reasons. Ready to discuss your project with our experts? Contact us via the website form!

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