Software development service business needs to change!
I have been working with different types of companies when developing products for Floobs and GigsWiz. Before I began the startup episode of my life I was selling IT consultant services for small businesses. Selling software development-related services (also known as IT consultancy) is not an easy thing to do. Personally I have to say that there were more times that I have been disappointed as a customer than satisfied with these projects. One basic problem is to define the project and find out how valuable the service really is. Some of the most innovative companies in this field are using agile methods and doing a pretty good job in transferring that agility to their customer relationship. Majority of these companies work on an hourly basis which is problematic for the service provider. It is hard to estimate how many hours it takes to develop a feature. This morning I woke up with a new idea related to IT consulting / software development business. Maybe this could be the future?
We are developing GigsWiz using the Kanban process. In our process we have four phases; backlog, development, testing and deployment. Each feature goes through the process as ‘tickets’. Our tickets are basically user stories about features. We have one basic rule with tickets, they have to be as small as possible. We have a product owner and Kanban master from SCRUM process. We also have retrospectives but we don’t really do sprint planning. When developers take new tasks to development phase they plan the tasks together and start developing features. The requirements (graphics, texts etc.) are gathered to tickets in backlog phase. We measure the success and failure of our process by counting how many tickets we complete monthly.
Maybe software development companies could use similar process. Especially those ones who manage their own developers. Instead of charging per hour of work they could put price to each ticket. The backlog could be made together by the project manager from the company offering the service and the buyer.
I think that this kind of process would work quite well for companies who offer software development services. Maybe the smaller ones better than big ones. Instead of charging clients per hour they could charge them per ticket. I believe that they can get better price for a ticket than an hour because customers can enjoy the benefits of transparency and get more involved if they want.
In this model there are many benefits both for the company providing the service and the customer. Service providers have better understanding of how much value their developers are creating for the company and they know better what they are doing. Customers are happier because they understand better what they pay for.
What do you think?