Strategic Adaptation for IT Outsourcing Companies: Entering New Niches Successfully

Strategic Adaptation for IT Outsourcing Companies: Entering New Niches Successfully

| February 23rd, 2024

There are a lot of challenges in entering a new IT niche, one of them is the temptation to chase new technologies and second is not realizing the importance of aligning with new market demands. 

Usually outsourcing teams in IT are wondering about what technologies are interesting or will be the next big thing. Idea is to be more attractive for new hirings and possibly acquire new clients by showing how progressive and skilled you are. This kind of thinking will make you mix all possible new and shiny technologies that maybe will not live for long in our ever changing IT landscapes. 

You will hurt your future hirings also, because developers don’t like companies who change languages and frameworks too oftenly. Balanced approach that values both innovation and stability can be a safe way forward. Learn to make mistakes, leadership is not about changing your mind too oftenly.

In this article I will point to the need of hiring high quality HR professionals and having all IT roles present in your organization as prerequisites for any serious niche adoption. Also having agile and devops transformations done in your company goes to already done things. 

Competence matrix is a document with up to 100 topics related to developers technical skills and a wide spectrum of his soft skills. They are used to map current skills of a developer against those required in the new niche.

You, as an IT company, are much dependable on the skills and knowledge of your own team to sell your services to a different type of customer. What are the skills they have today and levels of that knowledge? Being a senior developer in one niche doesn’t necessarily mean a developer will perform on that level in all possible IT niches. Being able to measure skills and competences of your developers and adjust their skills accordingly to client needs is a must have process in your company. The target niche is maybe using technologies you currently don’t know or it is a technology you are familiar with but you don’t have enough experience with. Maybe there is a need to learn a new programming language? 

Adjust your competency matrices to meet the new niche’s needs. During the hiring process snippets of the competence matrix are sent to a candidate. Self assessments are also part of this process. Each developer during his career is tracked inside this document. Developers are re-evaluated on skill jumps with recommendations for improvements in the future. Entering a new niche will affect companies’ hiring process and re-evaluation of the current developers. Maybe you don’t have a competence matrix or don’t know how to use it properly? This is the time to start learning how to use it properly. Contact me via the below form for more information.

Hiring developers with experience from the desired niche is also one way to go. Putting too much pressure on a team is also not always a good idea. 

Hiring a few niche specific skilled developers, and not all necessarily senior, will help your team feel stronger and the company will gain much needed experience. Key is in having robust HR processes and a strategic hiring approach. Hire for diversity in skill levels, not just seniority, to build a well-rounded team. 

Hiring an extra security specialist with niche specific knowledge can also help along the way. More and more companies are choosing security issues as their priority. Business analyst aka BA is also high on a new hiring list, maybe some experience in target niche is also on the missing skills list. Lastly, having an IT architect is a must have. Each developer is partially an architect, but let’s not confuse it with an IT role. Enterprise companies have different architectures of their internal B2B solutions that alone go beyond usual developers’ skill sets.

Outsourcing companies sometimes don’t have an IT architect in their company, this is the moment you will need one. Having this specific competence matrix to hire people with such a wide range of skills and competences explain You quite clearly how complex the task is in the first place. All of this will come very handy when you realize clients expect deep knowledge of their business requirements and internal architectural demands. Before you get a chance to code you need to show you satisfy a wide range of acceptance criteria, ranging from security, business to IT architectural ones. 

Ideally all this will happen before the first client arrives. But it is not always the case! It is a bit of bad luck if you get quality leads too soon in the process and get refused or rejected. Niche is in need, it is good news. Think like that if this situation happens!

Sales team probably already started selling your brand new services on all channels. Whole company is happy and enthusiastic about possible new clients. Sales channels usually need time to really start giving you quality leads. Patience! Lack of experience of your sales team in desired niche can prolong incoming leads. Different sales strategies probably need to be applied. Much more training and aligning sales efforts with the new niche’s specific demands and challenges are ahead of You. 

With an HR team able to execute all mentioned so far in this article it is hardly possible that the same HR team is not able to adjust your current team or hire a quality sales team. But before that, let’s try a market research cos understanding the new niche’s landscape to tailor sales pitches effectively. Continue with sales training, because we need to equip the sales team with the knowledge to speak confidently about the company’s capabilities in the new niche. Lastly let’s do marketing content that showcases expertise and successful projects within the new niche to build credibility. Overtime leads will certainly start coming.

Fintech as a target niche! World of interviews, acceptance tests and criterias. The world where a BA still matters.

Outsourcing companies in IT go through extra job interviews when entering financial institutions aka fintech for example. Bad news for your team. Of course your senior developers with 5+ years of experience are not either happy or ready to pass any of those interviews. Good it so, it tells a lot about the company culture you have. Good they are NOT so skilled in passing interviews. Also maybe it was a whole new language learned previously and your team is not ready to pass any interviews. Mentally they were not ready for another interview in their life. No giving up, adjust the competence matrices again, follow the process and start over. Yes and you need to teach developers again how to think and what to do in interviews. Getting bad feedback from interviews or your offer gets rejected are more less usual when trying to change your business or trying to enter a totally new niche for your business. What is important is to analyze and learn from those mistakes.

Opening a new niche for outsourcing teams is a whole process for itself. Adding a new IT niche client needs all HR processes working as a prerequisite for success. No HR, no niche!

After a while You got yourself your 1st client in a new niche. Again analyze and learn and change your internal processes to be able to repeat this success. Without running HR processes you will not be able to repeat this success. Here it is also valuable to understand that one client doesn’t mean success. Ability to repeat this success is what needs to be a trigger for company happiness. Let’s repeat. Changing or adding a new niche needs all HR processes working as a prerequisite for success. Ability to repeat also comes from systematic analysis of feedback:

  1. Create a Feedback Loop: Establish a structured process for collecting, reviewing, and acting on feedback from interviews and client interactions. 
  2. Identify Patterns and Integrate into Training: Regularly review the feedback to identify common themes or areas for improvement. Are there specific technical skills your team is consistently marked down on? Are communication skills or business acumen frequently mentioned? Use these insights to tailor your training programs. For technical gaps, consider specific courses, certifications, or internal workshops. For soft skills, think about communication training, interview practice sessions, or business case studies relevant to your target niche.
  3. Mock Interviews: Organize mock interviews that simulate the real interview environment of your target niche, incorporating the common feedback points. This helps candidates to practice in a safe environment and receive constructive feedback.

Actionable Tips:

  • Leverage External Experts: Sometimes, bringing in an external consultant, especially one familiar with your target niche, can provide fresh insights into how to address feedback effectively.
  • Peer Review: Encourage peer-to-peer feedback sessions where team members can practice technical presentations or interview questions with each other, fostering a supportive learning environment.

From the experience utilizing #retro, one form of agile meetings, is very beneficial in all cases. Running a proper #retro meet with usual structure that has actionable and measurable action items in the end will after a short period of time lead to team alignment. Agile transformation means your team is already able and used to being part of such meetings. Sadly though it is not always like that. 

I can’t emphasize more the strategic long-term benefits of these approaches beyond the initial entry into the niche, such as sustainable growth and continuous improvement of the company. Having a high quality HR process is the starter of any project. We talked in this article about ideas to change or add a different niche in your company. Lots of obstacles on this road, from technical ones to ones related to the whole functioning of your company. HR processes touch all parts of one company. Be ready to change yourself and learn fastly and positive outcomes will come eventually. If for example you need help conducting a skills audit or with a mentor to evaluate current HR processes please contact me via the below form.

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Kristijan Pušić

IT consultant and Business developer

Our consultant is at your disposal from 9 AM to 5 PM CET working days from Monday to Friday for any additional questions.

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    Setronica is a software engineering company that provides a wide range of services, from software products to core business applications. We offer consulting, development, testing, infrastructure support, and cloud management services to enterprises. We apply the knowledge, skills, and Agile methodology of project management to integrate software development and business objectives effectively and efficiently.