One of the factors to consider when selecting a supplier for a software project is the supplier size. The market spans from single-person workshops to giants employing several hundred thousand specialists. There are benefits and disadvantages on both ends of the scale.

General overview – small and big software companies

Why is the supplier size an important factor? The ways to collaborate change with the organization size. Different organization sizes come with different sets of benefits and ways of working. It is not only true about the supplier but also about the client.

Pros of small software companies

The smaller the supplier the larger the stake of your project in their overall portfolio. Hence, the larger impact of consequences if the collaboration goes wrong. In a small company, there are usually no processes or supervisors outside the team to bind their hands and hinder changes. These reasons make small companies open for a very tailored service both in terms of the contract, work organization, and technical solutions. The same reasons stand behind their flexibility. 

Company owner involvement or direct supervision of the project is another benefit. It puts the project at a very fast pace of decision-making. Investment in personal reputation is important and adds to the care for the overall focus and quality of delivery. Working with a person to directly decide about remuneration boosts team motivation. If an owner reports directly to the client and only to him, then the landscape of loyalty and direction is much easier to understand than the one in more complex working environments.

Small companies go a leaner way in handling employee contracts and general administration. Some non-critical standards of the working environment are ignored, and expenses saved. The attitude to spend rationally is widespread and applies to time, equipment, and all other costs. When the owners are involved in operations the pressure for margins is of a different nature than in places where operations are separated from the ownership. As a result, lower rates might be offered compared to larger companies, but it is not a generally observed rule, especially if the service requires highly specialized expertise.

A small company may evolve through a path of similar specialized projects. If the rotation of the team is within limits, substantial specialized expertise, as well as ways of working, develop providing superior efficiency and a competitive advantage in the narrow field. Selecting this kind of company suiting your project can save months or years of research and prototyping.

Small companies usually have relatively very simple and flexible operating procedures. As there are few dogmas, no precise behavior code and the communication is very direct it is quite easy to place existing paradigms in question and apply creative approaches quickly. If you want your supplier to have a try at doing something a totally different way than it is usually done, then a small company might sooner be convinced that you really mean it. 

Pros of big software companies

The resource pool of big companies, sometimes reaching hundreds of thousands of experts all around the globe, lets them mobilize large teams rapidly. They have more options to augment and upscale the teams as the project goes. The teams can rely on proven processes to launch and deliver a project of a larger size. The recruitment and conduct standards assure an acceptable level of quality.

Big companies combine the size with a working culture which the client might sooner adapt to than the other way round. The supplier can grow to be a dynamic and powerful co-driver of a project. This means a transition of the gravity center for some knowledge and control which may be beneficial for the project although it constitutes a stronger dependency on the supplier.

Big companies have proven ways to smoothly transition from new product development into continuity. They more likely have dedicated units focused on continuity and support and experience in taking over the activated product from development teams. The transition from a project to a day-to-day set of procedures does not have the kind of impact on team member duties as it would have in a small organization.

Hiring big companies is often considered a way to reduce project risks. They have better chances to sustain in adverse conditions and provide service continuity. They are more likely to have processes and solutions in place that are designed to pass specific audits and certifications. 

BWC.TECHNOLOGY and the supplier landscape

BWC team has experience in setting up and managing dedicated nearshore teams in small companies from Central and Eastern Europe.