Custom software firms are seeing increased demand for services as the COVID-19 pandemic prompts businesses in virtually all industries to take a hard look at their digital transformation plans.
They’re also leveraging the uptick in demand as a catalyst for growth and development.
“Whether it’s manufacturing, or across a bunch of different industries, we’re seeing (clients) make some significant investments into technology and automation and tools for their teams to use,” said Josh Hulst, co-founder and managing partner at Michigan Software Labs.
Hulst’s Ada-based firm works with a broad range of clients, including West Michigan manufacturers Steelcase Inc. and Holland-based Louis Padnos Iron and Metal Co.
As workforce shortages grow out of the pandemic, and now appear permanent, companies have turned to automation and advanced technology to fill the labor gaps. In fact, Hulst discussed a project that his team is working on for a large client that maintains warehouses across the country. Michigan Labs is creating a tech solution that allows them to operate with a leaner workforce.
The realization is growing among businesses that not only do they need technology to get the job done, but the economics are starting to make more sense given the turbulent labor market.
“I think the labor force is definitely a big (factor) right now, and probably the most glaring,” Hulst said. “But businesses are finding, ‘Man, it’s really expensive to potentially even hire the people that we need — and that’s if we can find them at all.’ So, the idea of investment becomes more interesting.”
Grand Rapids-based custom software developer Atomic Object LLC, which operates additional offices in Ann Arbor and Chicago, is diversified across many sectors but also has a leg in the manufacturing space, working with clients such as Whirlpool Corp., Gentex Corp., Amway Corp. and Eaton Corp.
Atomic Object co-CEO Michael Marsiglia acknowledged the surge in demand tied to Industry 4.0 migration, and added that similar dynamics are playing out across other sectors.
“The world has known for a long time that you have to be somewhat of a digital company to survive into the future, and I think people are slowly going toward that and I think the pandemic was sort of a massive wakeup call for corporate America that it needs to be accelerated even more,” Marsiglia said. “We’re seeing tremendous increase in demand from all different types of digital products from all different industries.”
Out of the box
Atomic Object co-CEO Shawn Crowley said the company does take on occasional projects to address software-specific business processes tied to automation.
But for manufacturing, the more economic and effective solutions come from out-of-the-box options such as robots, cobots and sensors, he said.
If, for example, Tier 2 or Tier 3 suppliers want to write their own custom software, “Our recommendation is don’t. Don’t hire a firm like Atomic Object,” Crowley said. “You can start by getting off-the-shelf modules and units. Don’t go trying to build it custom. You’re going to spend a lot of money and it will have a higher cost of maintenance.”
With advancing technology, out-of-the-box automation solutions have become quite economical. Crowley predicted that industry players will move toward commoditizing these solutions, making them even easier to implement.
“Just like information systems in office environments like HR management systems, you’ll see all these (software as a service) offerings probably coming from the warehouse management systems world. They’re going to lean into them to produce something like a monthly subscription service for manufacturers,” Crowley said.
Hulst agrees, adding that his company works with manufacturers to explore the most effective ways to implement out-of-the-box solutions.
Growth and training
Michigan Labs is using this momentum for growth. The company moved into its new building in Ada in June to create expanded physical space for collaboration among team members and clients. The 16,000-square-foot space includes room for future expansions.
With little overhead in its business model, the biggest asset for Michigan Lab and other software developers is its people, making training and development vital.
Over the last couple of years, Hulst said Michigan Labs has doubled down on its development initiatives to bring on and train software developers, designers and project managers.
This includes budgets to buy books and other materials as well as conference stipends. Michigan Labs, like many businesses throughout the COVID era, also provides flexible schedules. Employees can work a couple of days from home each week and also spend up to four weeks working anywhere in the world.
Meanwhile, Atomic Object has expanded into Chicago — a transition that was interrupted by the pandemic and ensuing shutdowns of in-person work. The company may announce new offices within the next few years. Across all three offices, the company stresses continued learning.
“We really work hard to build that into our culture,” Marsiglia said. “One of our core values is to teach and learn; when you work here, that’s one thing you’re signing up for. We recognize that the world of technologies is not static. It’s very dynamic and there are always things to learn.”