Emerging Markets for Software Quality Contracting

Engineers and managers within the software industry tend to focus on highly-developed “tech hubs” for human resources, component suppliers, and final markets. These high-activity areas include places like Silicon Valley, Seattle, New York City, Boston, Berlin, Singapore, Hong Kong, Seoul, and Tokyo. However, as a consultant or contractor, it is important to consider additional possibilities, such as emerging markets in Africa and Asia.

Working in emerging markets requires a different set of skills, compared to working in developed markets. The most notable difference is the level of complexity, sometimes understood through an “action consulting vs. process consulting” perspective. Let’s consider an example of automated testing systems. In developed markets, this would be “action consulting” - providing a recommendation on particular technologies and approaches. The stakeholders in the project are likely to have foundational knowledge of software systems engineering and release engineering. They are also likely to understand related theories, philosophies, and underlying principles - perhaps gained through Agile software development training. In this scenario, the consultant is free to focus on the technical details of the challenge.

In emerging markets, the situation is often more complex, and closer to “process consulting”. This level of consulting not only involves heavy technical aspects, but also challenges related to organizational behavior, philosophy, and sociotechnical processes. For example, the relationships between family members in an Africa-based small family business may be critical to the success of the organization. In this case, the human factors must be managed just as carefully, or perhaps even more so than the technical factors, throughout all stages of the consulting engagement. The nature of interactions with governmental and financial institutions may also be less clear and more difficult to navigate. Strong dynamic solution knowledge and emotional intelligence may be necessary to succeed in these engagements.

In Europe and North America, software engineers and managers become accustomed to relatively low context communication and relatively low context organization cultures. Emerging markets, in Africa and Asia for example, tend to operate within a high context culture. This means that relationships, families, belief systems, and history must be understood when engaging with the organization. This is particularly true with family businesses in emerging markets, as the finances and operations of the company are deeply tied with the identity and well-being of the family.

Software firms can serve a wide variety of purposes in an emerging market. At one end of the spectrum, we consider the opportunists. Opportunists see the emerging market as an additional marketplace for the sale of an existing product or service. With this level of engagement, the company does not make substantial adaptations to the product value chains, operations, or strategy. On the other end of the spectrum are firms who become fully immersed in the emerging market. This could involve dramatic changes to organizational philosophy, strategy, and operations, in order to succeed in the market. These companies are strongly committed to global strategy and view markets holistically. As one might expect, both the risk and reward increase with deeper immersion in the emerging market.

As a consultant, it is vital to understand the different purposes and levels of engagement for organizations entering emerging markets. For both practical considerations, such as developing a global strategy which meets risk exposure requirements, and more holistic considerations, such as the culture and philosophy, the various purposes for emerging market engagement require a different set of tools and approaches.

As a consultant, one of the first steps in the engagement should be establishing the purpose of the firm’s engagement in the market. There needs to be continuity among the stated purpose of the engagement, the attitudes of the organization towards the engagement, and the resource allocations for market entry. For example, a firm with the goal of becoming a highly-integrated emerging giant in the market needs to have substantially more resources than a firm who is entering the market simply to sell an existing product or service. A successful strategy can only be established on the foundation of a well-defined purpose.

Engaging in emerging markets can be difficult, and requires the consultant or contractor to possess a unique set of skills. However, emerging markets are full of untapped business opportunities. For those bold enough to try, engaging with emerging markets can provide substantial rewards, both for the individual and society as a whole.