Getting the Most Value with a Development Partner

July 10, 2013

Kanban Board

What is software development?

When we say software we typically mean a software product to sell to a market or a system to increase productivity. In both cases, doesn’t the customer have some idea of the cost and potential value before the project is initiated?

If the initial estimated cost versus the expected value (Rate of Investment or ROI) isn’t high enough the project would never be started. In this case you could say software is too expensive or simply doesn’t make sense. On the other hand, if one knew a software product would cost $1 billion to build but would bring in $5 billion in guaranteed revenue the software would not be called expensive, it would be labeled a no-brainer.

Our industry often sets its context too small to address the question of why software is so expensive. While addressing costs, we missed optimizing the other side of the equation: value.

Software systems are notorious for not providing the expected value. Products are as well, but perhaps to a lesser degree because markets are so brutal. If people don’t like the product, they don’t purchase it. This isn’t the case for systems developed by companies for internal use. The users have fewer options.

Studies show us that the bigger the project, the likelihood of cost overruns increase. This we know from experience. We also know from life that things change, stuff happens, and people (users, customers, and markets) are fickle. The factors affecting cost expectations and software estimation are complex. Miscommunication, scope creep, bad estimation practices, and market changes are factors affecting cost estimates. Projects are even abandoned after major investments because of cost overruns and lack of support.

Businesses are working to improve value delivery on internal systems. Perhaps the development of systems needs to better match that for products. To move to a new level of optimization, we need to expand the context of our development process to engage more of the value oriented constituents.

At SEP we use lean and agile practices to address some of these issues. Our approaches embrace change and can in essence break larger projects into smaller ones. When we can use a collaborative approach with the client we also see improvement in value delivery.

SEP has also seen great benefit from Kanban. We’ve become more efficient; reducing our development costs and increasing the amount of output we can produce. But continuing on this path will ultimately lead to diminishing returns unless we move to the next level. SEP has added Discovery services to its offerings as a means to address some of the upstream delays and unnecessary features feeding our development activities.

All of these services have helped tremendously but we continue to go further in an effort to minimize cost and maximize desired results for both clients and SEP.