CEO, Merit Group
The challenges of enterprise software development have changed over the years. Where there was once a well-trodden debate between buying off-the-shelf software or developing your own solutions, the build-or-buy lines have blurred.
Con Conlon is CEO of data and software solutions provider Merit Group, and he believes there’s really no such thing as off-the-shelf software any more. “Even if you buy something like salesforce.com, you still have an awful lot of building to do.”
So rather than considering whether to build or buy software, he thinks a far more relevant question is ‘How do you build?’ and advocates a strong mix of internal talent and partnering.
Describing himself as a former ‘code jockey’, Conlon first started working offshore during the dotcom boom. He founded Merit in Chennai, India, in 2003 and the firm’s 900 staff now supply development support to clients including RBI, UBM, Ascential and Informa.
Since he set up the business, Conlon says outsourcing relationships have changed significantly. Old-school, ‘one dimensional’ approaches are giving way to an agile, collaborative, mix of internal and external teams.
“People are not building up a huge heavy team in the UK, which is expensive. They are keeping a good core of in-house resource, then using partners in a scalable way, dialing up or down the partnership resource.”
Because they work for a variety of businesses, partner companies also bring a wider view of the technologies available. As we stumble from one revolution to another in technology, Conlon says, “having your own little team in say Nottingham or London can be quite insular.”
Merit’s focus has evolved over the years, with 40 percent of the company’s revenues now coming from the business intelligence sector where the company works with publishers and intelligence providers to build premium digital subscription products.
Conlon thinks the publishing industry has done quite a good job in moving to other sources of revenue, especially in B2B where publishers have a wealth of experience in a particular vertical.
Merit’s media clients typically serve very narrow niches, and data products that leverage the publisher’s subject matter expertise can capture subscriptions up to £5,000 or £10,000 a year on per seat or site license basis.
Conlon describes Merit’s role as helping collect and manage raw data, using software built specifically for each client:
“Our clients find significant value, and often competitive advantage in the automation tools we build that gather and organize their data. There is also a manual element and a management infrastructure with software expertise needed. It is just not viable to have this all in-house.”
Particularly in the data product space, where media businesses are investing heavily at present, there are a couple of key drivers for a rise in software development. One is the increasing reliance on multiple data sources, with publishers consolidating information to present a more detailed and valuable market view.
“The richer the data, the more sources we use, the more you can defend your position by embedding your product in to the workflow of your customers,” says Conlon.
Related to this is the ability to sharpen product focus. “There is a level of control that you get when you build a product from scratch,” Conlon explains. “I suppose companies are more and more seeing it as part of their competitive advantage.”
He acknowledges it can be difficult to pin down whether build or buy is actually cheaper. But, even where the build is not obviously cheaper, he says you have more control over factors that bring that all-important competitive advantage.
“You can really focus on the data and intelligence your customers are specifically asking you for and, ultimately, generate more subscribers and more revenue.”
When it comes to choosing a software development partner, the secret to success is a mix of ‘hard’ and ‘soft’ factors.
The ‘hard’ elements are whether the prospective partner has the right skill set, a credible development history and the right commercial and financial backing. “These are all the standard things that people will look for when you’re working with an external partner,” Conlon says.
The ‘soft stuff’ is equally critical to the success of a partnership but harder to pin down. “It’s more difficult to get the feel for the culture of the partner, but it’s really, really important,” explains Conlon.
“Is this partner going to tell me when I’m going down a rabbit hole? Are they going to nickel and dime me every time I put my little toe over the line of the spec? Will they be able to bring in new expertise or a new way of thinking – to help me innovate in a smart and successful way? Will communication be fairly straight forward or tortuous?”
“You’ve got to look at their cultural approach, the communication, the size, are they going to be the right fit for you as a company? If your proposed supplier has fifty or one hundred thousand employees, will you get the care and attention you need? Go and meet them. Visit them before you commit. Talk to their existing clients and ask the hard questions.”
Where communication between client and off-shore partner can be difficult, Merit uses expatriates to manage resources in India. Conlon gives the example of a client that is pushy or aggressive on timescales.
“In India, the culture is not to contest that. Expats are more inclined to say, ‘You’re completely bonkers, you’re never going to get that done by Christmas’.”
That sort of straight talking is important in a relationship that has moved from remote command and control to ongoing collaboration. And it adds a new dimension to what was once a binary choice between almost-right off-the-shelf solutions and large, long-term build costs, making customer-focused development a manageable, agile and affordable option for media businesses of all sizes.