Regional Small and Medium Business in IT

The next “interesting time” made me recall my own experience and reflect on the fate of the regional small and medium-sized IT business, and think about how the community of all those involved in optimizing and implementing business process models and developing appropriate software products could help it.

The path that small and medium-sized IT businesses have traveled over the past 25-30 years has been long and arduous, and the quality of business processes and the welfare of the business often still leaves much to be desired.
I wish that in the event of some tectonic shifts, the business would not roll back 25-30 years ago, and that progress should continue.

With this publication, I will begin a series of articles on this topic with a search for solutions.
Consider the history and current state of the business associated with information technology, using the following groups as an example:

1. Rather young companies founded in the late 90s - mid 00s and engaged in the development of information systems for the federal and international markets.

The subject areas are completely different - e-commerce, electronic document management, mobile and web applications, energy and housing and communal services, manufacturing, logistics, warehouse, multi-agent systems, and even the space industry.

One part of the companies is engaged in outsourced development, the other has its own projects.

Outsourcing is a separate conversation, but in the second case, the company, as a rule, has one or more technological platforms (frameworks) already developed, on the basis of which custom development is carried out.

The advantage (at first glance) of this approach is the rather quick adaptation of existing, already completed projects for new customers on their own. However, in practice this results in the fact that each of the projects has several “branches” (for each of the customers). Several "branches" within one project are difficult and expensive to synchronize with each other, maintain, and develop. Companies several times try to “merge” branches into one, then they are forced to split the project again, etc.

And it is not only the extra labor costs of developers (programmers) that are discussed, and above all, project managers (hereinafter RP) and analysts.

RP and analysts spray power between project branches instead of collecting and summarizing the initial data once, and then setting the task to develop a single domain model and a single functional that could be parametrically configured for specific customers.

As a result, due to lack of time and effort, analysts can draw up the results of their work not with the help of certain notations, but with the help of a text editor, inserting the inverse images of the screen forms, the simplest flowcharts and text descriptions (and in the future this is not correlates with program code and database schema).

As a rule, the life cycle of one such project is about three years, after which the existing models (analytics results) and the developed technological platform are at a standstill, due to reasons of non-optimal project management (see above) and non-optimal team structure.

An example of errors in the team structure: duplication of functions, conflicts of interest, omissions of necessary links (for example, lack of a database architect).

Top management can largely replace the project team: top management, who oversaw the project, project managers, analysts, software architects and databases.

After that, work on the project (s) begins anew, with a new team: new task setting, analytics, technology platform, and possibly even a programming language.

However, often in the management of projects and organization of the team, the previous errors remain, after which the story is repeated with a high degree of probability.

According to some estimates, throwing between the "branches" within each of the projects exceeds the costs required to develop each of the projects in the form of a boxed solution:
  • one project - one "branch";
  • one project - it is configured parametrically for each of the customers, this does not require analysts from the development team and the developers themselves, dealers who have their own staff of analysts and implementers can do the tuning;
  • several related projects - box solutions in the "portfolio" of the company may cover one large subject area.

2. Rather mature companies, from the late 80s - early 90s. involved in the development of information-measuring systems, communication systems, telecommunications, the development of mathematical support

2.1. Former defense and industry research institutes and design bureaus, for example, engaged in the development of information-measuring systems (software and hardware systems and communications) and related software for the oil and gas sector (production and transport). This is a “small topic” by the standards of their golden era of the 70-80s, when they were engaged, for example, in very large defense communications projects.

They have a name and contacts that are significant for customers and government agencies, a reserve of strength based on personnel and standards of the Soviet military industry (lost over time), access to administrative resources, and work at the federal level from the regions. Something rests on the surviving "red directors", who came to power in the late 80s on the wave of the election of leaders of labor collectives.

Corruption and voluntaristic decisions, inflexible behavior in a market economy, lack of modern business and production processes, unreasonably long adoption of objectively necessary organizational and technical decisions (or generally non-adoption) are often characteristic.

2.2. Small enterprises founded by representatives of the above structures or people who collaborated with them at one time, dealing with the same problems, and more efficiently.

Compared with the first group, tasks are usually solved ahead of schedule (including reaching the federal level, with the prospect of expansion to neighboring countries), using more advanced technical solutions.

This is possible due to the more modern thinking of managers, the best personnel flowing from the first group, mobility, a simple organizational structure and the absence of bureaucratic delays in decision-making.
In the conditions of the economy of budget-oriented environmental and natural monopolies and access to administrative resources to a lesser extent, such companies have low development potential if the company at some point is not under the “roof” of a large structure as a unit (however, this option is fraught with the loss of the company’s identity and related benefits).

Companies may not have prescribed internal business processes - at first, a small enterprise copes without them, and as it grows, it continues to work “as it happened”.

In some cases, managers can stop the company’s development strategy and try to freeze the situation “as is” and make only profit, which contradicts the well-known truth “You need to run as fast just to stay in place, but to get somewhere, you must run at least twice as fast! ”with the onset of the corresponding consequences sooner or later.

2.3. Separately, we can mention the medium-sized business (which has long turned into large), which was also founded by representatives of the first group, while securing an administrative resource with the help of directors - old appointees, and not a young elected shoot of the late 80's. The founders of such a business are more proactive and successful - and they started earlier, and took up not the topic already known from their previous work, but new trends, the prospects of which few are able to “see” in advance.

One example of such a business is perhaps the well-known interregional telecommunications company.
These types of companies may have development difficulties due to their small-town roots and appropriate business thinking, and strong pressure from players initially at the federal level.

Accordingly, such companies also need to optimize business and organizational processes to reduce costs and increase growth potential.

In the next publication, we consider a general description of the IT business, identifying strengths and weaknesses in the business processes of companies, with optimization proposals using appropriate business intelligence and, possibly, specialized software products.

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