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Today, software has become the invisible hand shaping our lives. From the moment we wake up to the screens illuminating our morning routine to the algorithms curating our online experiences, software is the universal force driving the digital age we live in. Its impact extends far beyond personal devices, permeating every facet of modern society, from critical infrastructure to scientific research and global communication.
In particular, executives at mid-large corporations now face a multitude of pressing challenges, including financial performance, strategic growth, talent management, and compliance. In today’s interconnected world, technology and digital transformation have become central to success. Solving their most complex business challenges by applying innovative digital solutions can be the right approach, if executed successfully, but it can be daunting to do so. Hence, in this post-pandemic world, businesses must innovate to survive.
The COVID-19 pandemic significantly disrupted the global business landscape, presenting formidable challenges. Businesses across all sectors endured supply chain disruptions, workforce shortages, and the complexities of a remote work environment. These factors, coupled with a decline in consumer demand and increased competition, resulted in financial stress that forced many businesses to implement cost-cutting measures.
In the face of constant change and disruption, fostering a culture that welcomes reliable, rapidly evaluated, and tested innovations is imperative for business success.
Alfredo Arvide
Despite these hardships, many businesses demonstrated remarkable resilience and adaptability, implementing innovative solutions, embracing technology, and adapting to the new reality, albeit very inefficiently. Businesses were forced to deal in the unknown and simply did their best. The long-term impact of the pandemic is still unfolding, but it has undoubtedly accelerated the pace of change and forced companies to adapt to a fundamentally transformed business landscape.
In 2016, just less than ten years ago, Ben Rossi, the editor for Information Age magazine, reported that businesses had about two years left to plan and implement digital transformation business strategies, before it was too late. Now, if you are not in the 95 percent of services companies that have adopted a digital-first strategy, or in the 93 percent of financial services institutions that have fully embraced digitalization, or in the 92 percent of healthcare organizations that are constantly pursuing digital transformation initiatives, or just not considering digital transformation at all, then you don’t have much time.
Research presented in 2022 by Forrester’s Technology & Innovation group revealed that two-thirds of technology decision-makers will continue to increase their tech budgets, despite increasing economic uncertainty. However, these bigger budgets, to stay competitive, will sponsor a more practical approach to innovation experiments prioritizing customer needs. Simply put, 80 percent of companies will pivot their innovation efforts from creativity to resilience, and therein lies the keys to success.
In the face of constant change and disruption, fostering a culture that welcomes reliable, rapidly evaluated, and tested innovations is imperative for business success. Gone are the days of grand, speculative leaps. The future of innovation lies in continuous, incremental improvements that enhance competitiveness and resilience.
To guide organizations through this new era, I present a renewed innovation framework tailored for custom software development projects.
The Innovation Framework for Custom Software Development
Although agile methodologies embrace the concept of continuous integration and continuous deployment (CI/CD) of new features, updates, and bug fixes into existing products, this innovation framework is specifically designed to aid companies in developing and launching new products and services with both regularity and efficiency. This streamlined methodology provides a clear road map, encompassing four distinct phases.
1. Design Thinking Phase: 2 Weeks
The initial Design Thinking (DT) phase assembles a dedicated team of program management, technical leadership, design thinking expertise, and user interface/user experience design. This team, alongside stakeholders, engages in multihour interactive sessions to brainstorm and prioritize potential features based on their market impact. The phase culminates in a deliverables package, including a clickable prototype showcasing features in a mock interface, an architecture and infrastructure diagram outlining the product’s technical foundation, and a proposal detailing the timeline and cost estimates for development.
2. Proof of Concept Phase: 1.5 Months
The subsequent Proof of Concept (PoC) phase lasts approximately one-and-a-half months, strategically designed to validate potential market traction for planned features before committing to full development. This phase leverages the DT outputs to build a basic product for user and investor feedback. Utilizing a small team of one program manager and one senior developer, the PoC aims to implement key features within three sprints (assuming two-week sprints).
This number is precise, and it gives the team one sprint to ramp up, one sprint to focus on development, and one sprint to test, deploy, fix bugs, and present. Timeboxing minimizes financial expenditure while capturing crucial feedback that can be incorporated into future iterations. Importantly, the PoC acts as a failsafe, allowing for adjustments and revisions during the DT phase before investing in a Minimum Viable Product (MVP) or full launch, potentially saving significant resources and avoiding market misfires.
3. Minimum Viable Product Phase: 3 Months
Reaching this final phase signifies a crucial step: embarking on the actual custom software development journey. While team size and composition vary, it typically requires only a few developers and project managers due to the completion of ancillary tasks like architecture and design in prior phases. However, the journey isn’t complete. Building a product with all envisioned features right away is not recommended. Instead, this phase emphasizes focusing on the MVP features necessary for market viability. This approach ensures budget control and launches a product capable of generating both revenue and crucial feedback for future feature iterations.
4. Version 1+ Product Phase: 6-Plus Months
The final phase, Version 1+ (V1), marks the culmination of the Innovation Framework, but it’s not the end of the journey. Here, the main team takes the MVP and integrates it seamlessly into the existing live product, launching a fully-fledged offering with all envisioned features. Continuous monitoring and optimization, fueled by user feedback and key performance metrics, drive ongoing improvement and adaptation. This phase extends the essence of the Innovation Framework, embracing continuous evolution and unlocking the full potential of your custom software development journey.
An Innovation Framework Example
Let’s consider a mobile ordering platform for restaurants as a case study to bring the Innovation Framework to life. Said platform currently offers features like in-app payment processing, custom menus based on preferences, and dish-specific reviews. To thrive in this dynamic environment, and follow the framework, the company would schedule quarterly DT sessions (Phase 1).
During the first quarter session, a new feature idea emerges: adding videos and multiple images to each menu item. This would allow customers to visualize dishes before ordering. Upon approval, a PoC is initiated (Phase 2). The PoC involves integrating videos into the existing menu view. After three sprints, it becomes apparent that videos are too long, large, and cumbersome for small mobile screens.
Undeterred, the team returns to a DT session (back to Phase 1), incorporating these learnings. They refine the idea, limiting video inclusion to a single “featured plate of the week” displayed prominently at the top of the menu without hindering other functions. The revised PoC proves successful (Phase 2), paving the way for an MVP (Phase 3) that seamlessly integrates into the live production environment.
This example demonstrates the cyclical nature of the Innovation Framework. It highlights the importance of iterative testing, feedback incorporation, and continuous refinement to ensure successful innovation and maintain a competitive edge.
A hybrid team provides the perfect answer by offering diversity of thought.
Alfredo Arvide
A Nearshore Hybrid Team Competitive Advantage
Having now mastered the Innovation Framework, consider a further competitive edge in this dynamic environment: leveraging hybrid teams through nearshore partnerships. The “work from anywhere” paradigm, brought on by the pandemic, gave us permission to work when and where we wanted. When coupled with cost-cutting imperatives, this approach is optimal for affordability, timeliness, and overall success.
Budgets allocated to innovation and survival tactics can be maximized by creating diverse hybrid teams that enhance creativity and collaboration. These can include your own employees (local or remote), individuals working through a local software development provider, or geographically dispersed contractors. Such hybrid teams unlock significant advantages in this competitive landscape.
Furthermore, this flexibility of mixing various levels of experience, expertise, and enthusiasm is what technology companies need to innovate and thrive. A hybrid team provides the perfect answer by offering diversity of thought. This allows companies to pivot a product toward launching a timely version that meets essential requirements, avoiding missed market opportunities, and maintaining progress. A hybrid team’s flexibility also enables scaling up quickly to increase velocity at peak periods and scale back down when extra hands are no longer needed, saving unnecessary costs.
In practice, a digital product comprises numerous components, including the backend, frontend, databases, algorithms, modules, microservices, API connections, frameworks, and more. To build a successful hybrid team, companies must determine which components are unique to their solution and which are replicable.
We urge companies to own and manage the components that are uniquely theirs, as these represent competitive advantages, trade secrets, and key elements of success. Entrust the most dedicated and loyal engineers with these critical components. The remaining components can be outsourced and nearshored.
A Hybrid Team Example
Building upon our earlier example, the restaurant mobile ordering platform enables diners to login and interact with the menu. While features like user login, cloud-based services for managing user accounts, and profile data management are readily available and replicable across countless platforms, they lack a unique competitive edge. Consequently, outsourcing such functionalities becomes a strategic and cost-effective choice.
Conversely, the intelligence behind the dynamic menus, which personalizes recommendations based on dietary allergies or preferences, requires bespoke algorithms that offer a distinct advantage over other online food ordering systems. These algorithms represent the core intellectual property and competitive differentiation, necessitating in-house development and ownership.
This framework provides a road map for continuous improvement and iterative adaptation, empowering businesses to respond to evolving market needs and maintain a competitive edge.
Alfredo Arvide
But, why nearshore? Nearshoring—outsourcing development to nearby countries like Mexico, Brazil, Colombia, Chile, and Argentina—offers a powerful advantage for hybrid teams driving innovation. Shared time zones facilitate seamless collaboration, cultural compatibility fosters market-relevant solutions, and cost savings allow for strategic resource allocation. This potent mix fuels innovation, enabling teams to develop products that resonate with target audiences and drive long-term success.
While traditional offshoring also offers cost benefits, time zone incompatibility and vast cultural differences can hinder communication and market understanding, ultimately impeding the success of innovation initiatives. Nearshoring eliminates these challenges by placing the team geographically and culturally close to the target market. What will be a useful innovation in India, China, or Malaysia may not be relevant in North America, and a nearshore hybrid team would have that innate knowledge built in maximizing the impact of the innovation framework.
In our current hyper-competitive market, the Innovation Framework emerges as a critical tool for navigating the dynamic landscape of technology. While the market may eventually settle, the current environment demands agility and swiftness. This framework provides a road map for continuous improvement and iterative adaptation, empowering businesses to respond to evolving market needs and maintain a competitive edge.
While Winston Churchill famously once said “Perfection is the enemy of progress,” the current reality necessitates a shift in perspective. In a world where rapid innovation and early market validation are paramount, progress must take precedence. The Innovation Framework facilitates this transition, enabling businesses to embrace experimentation, learn from failures, and ultimately achieve long-term success in a constantly evolving landscape.
One Last Piece of Advice
When evaluating a nearshore partner, prioritize key considerations:
- Location: Assess developer proximity and accessibility for seamless collaboration
- Experience: Seek a partner with proven successes within your industry or similar domains
- Culture Match: Prioritize cultural compatibility for a positive working relationship
- Communication: Evaluate communication clarity and responsiveness during the evaluation process
- Methodology: Ensure the partner’s development approach aligns with your standards and team dynamics
- References: Contact past clients for firsthand accounts of the partner’s performance and collaboration style
Keeping these six attributes top of mind when hiring extra help will ensure a successful partnership in your future Innovation Framework endeavors.
Alfredo Arvide is the chief innovation officer at Blue People, a nearshore custom software development company that won the 2023 Houston Innovation Awards: People’s Choice Startup of the Year. Arvide applies his twenty-plus years in tech to help clients solve their most complex business challenges by leveraging emerging technologies and deploying innovative technology solutions.
