An open letter from Softhouse to the Swedish software industry
Many in the software industry who are looking for partners stand at a crossroads. In one direction is a sign that says, “Guaranteed lowest price per hour,” while in the other direction it says, “Guaranteed best value for money.” Which path should we take?
Those who opt for the first choice, focussing on the initial cost, reason as follows:
• Think “resources” and ignore the individual developers’ own particular skills.
• The lowest hourly rate wins – no matter how much is actually delivered per hour.
• We pay for the hours spent, not for what has been accomplished; increased productivity is not a priority.
• It is not possible to control code and product quality. Developers must target their focus on their individual tasks and not be distracted by questions of business benefits and holistic approaches.
• A fixed price means you control your costs, even if you constantly have to discuss price changes and marginal thinking.
Those who opt for the second choice, with a focus on the overall cost, have a different approach:
• Pay only for what is actually delivered.
• Create a feedback system to ensure that the right things are delivered.
• Broaden cooperation with the supplier and promote the greatest business benefits for both parties.
• Create incentive models that encourage productivity, efficiency and flexibility.
• Look for competence and commitment, and regard this as essential for success.
• Maintain a focus on total cost (development, maintenance, etc.) and involve the supplier in the process. Start with simple business models and adjust them continuously for joint value creation and improved performance.
In a world where knowledge and technology are advancing, the buyer will always want to pay less tomorrow for the same value that was delivered yesterday. Paradoxically, sellers think the other way around: they want to get paid more tomorrow for the same work effort and investment as yesterday. The only way to resolve this contradiction is for the seller to deliver greater value with less effort.
Of course this is no easy task and requires that you “run faster and faster to stay in the same place” – just like the Red Queen in Alice in Wonderland (a phenomenon known as The Red Queen Effect). At Softhouse we have noticed that we – like many other companies in our industry – can live up to this. We have a skilled corps of developers who know both how to create good software and how to organize work so that everyone feels good and performs at their peak, thereby providing maximum benefits at the best price.
When we devote attention to producing efficient code and when we apply agile methods – yes, we do it because we know that it is the easiest and smartest way to create lasting value for ourselves and for our clients.
Scandinavia needs a vibrant and progressive software industry. It is therefore important for those of us who work in the industry to raise awareness that the most affordable option in the long run is to …
… use dedicated and talented people …
… who use modern methods …
… continuously and at a steady pace …
… to produce measurable results …
… with great business value!
Think about it. Don’t you yourself believe that we all benefit from a long-term approach?