Win/Win Software Services: Elephants and Methods

Most people embrace the concept of "win/win", but what does this mean in the context of commissioning a team from outside your organization to develop software? As a buyer of software services, you want clarity on what you are buying, how much it will cost, and how much time it will take… and you want the code to be perfect in every way. As a developer of software, your development team needs a clear �nish line, and a reasonable level of technical risk to manage. Is it possible to forge a business relationship that satis�es both client and service providers?

Based on more than a decade of experience developing software for our clients, we would like to share our perspective on this question and lay out the principles for an engagement model that we have been re�ning over the years. These principles act as guardrails on a highway, protecting all travelers from the abyss that lies o� the road to either side. We explore answers to these questions by traveling through the following concepts:

Can buying software development services really ever be a win/win value proposition?

Stay tuned to the Twisthink blog as we expand into other directions on this topic in the future.

Simply put, the goal is to create new value and monetize it.

Finding ways to create new value isn't easy, and having the disciplined courage to look beyond your existing business is rare. Research documented Harvard Business Review shows that only 9% of all US public and private companies are doing any kind of serious innovation.

If you are part of the 9% club, you understand the impact that technology can have on creating value for your business. As the lines between the physical and digital worlds continue to blur, companies are feeling this pressure to �ll an engineering and technology gap within their organization. However, these resources can be expensive to home grow; and, once they are internal to your organization they become susceptible to

The Goal

Introduction

The GoalPartners engage in order to create business value and monetize it.

The ElephantsBoth partners want to design business engagements that minimize costs and maximize value. However, business interests are in con�ict in ways that make us perceive projects di�erently.

The MethodTwisthink and its clients collaboratively follow an iterative product development lifecycle (PDLC) and converge toward the goal.

Win/Win Software Services: Elephants and Methods

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tyranny of the urgent. They become captive to short term needs of today, not the nebulous innovation needs of tomorrow. Given this tension, you may be attracted to the option of leveraging an outside resource. You will need guidance to de�ne what needs to be done, develop it into a solution, and roll it out to your customers. Leveraging external development teams can be a great strategy for ramping up this innovation focused e�ort quickly, and without distraction. We have found that technologists and user experience designers each bring a valuable point of view when planning the technical objectives that move from the fuzzy beginning stages of a project to the clarity of an exit review.

For each phase of the project, it is very important to recognize the current phase as well as target the objective of the next phase. Each phase requires its own tailored process and de�nition of success. After doing this for hundreds of clients, we have framed a set of milestones that can help organize our work:

1. Proof of Concept (PoC) Useful to communicate and verify a concept (e.g. use a journey map, paper drawings, web/PC simulation)

2. Prototype Useful to prove out feasibility and check on risk items (e.g. use a 3D model, development kits, "plug n play" cloud platforms)

3. Alpha Initial development-level build, typically with soft tooling and custom circuit boards. Usable for internal functional testing and UX testing.

4. Beta Final development-level build with re�ned mechanical and electronic design. Usable for external testing with friendly customers, compliance testing, commissioning exercises, stakeholder approval.

5. Pilot/Launch Production-intent build used to verify the process and make �nal tests. Monetization and Commercialization begins. Paying customers with high expectations. The beginning of building (or damaging) the brand equity of the solution.

The journey to production launch will not be clear and a straight line. Repeat. The goal will not be clear. Are you still believing you can "de�ne and specify" as a �rst phase? Stop the insanity. Let's change the paradigm. Let's change the goal.

Instead of focusing on "de�nition", let's focus on learning as much as possible… and reducing risk as quickly as possible, while establishing an e�cient feedback mechanism with all your stakeholders.

The stakeholders, after all, get to determine if we are creating value or not.

Win/Win Software Services: Elephants and Methods

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Any collaborative venture has to deal with potential friction points between its participants. Every project is di�erent, but in the messy world of developing new things you should assume that the unexpected will happen. When it does, the partners will tend to make decisions that are in their own best interest. News �ash… the interests of the partners are not the same. During a development project, the best solution is typically to work through the problems together, take steps to ensure they don't happen again, and continue moving toward the goal. This takes a partnership mentality based on trust. So, what’s the elephant in the room? They are the obvious problems or risks that no one wants to discuss. Unfortunately there are multiple elephants, and we intend to address 3 of them here. So, bear with us as we unpack these challenges. Then, in order to proceed with a project, a method must be put in place. What you don’t want to do to is ignore these risks, which will prevent you from achieving the ultimate goal of creating true business value for your business.

The Elephants

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Win/Win Software Services: Elephants and Methods

Both you and your external team want a business engagement that minimizes cost and maximizes value, but... Each will see the engagement from di�erent perspectives that shape their approach to the project. You want to maximize pro�t and enhance your brand with the best-possible product launched in the advertised timeframe. And of course, your external team also seeks to win by maximizing pro�t and securing their reputation by delivering the de�ned scope of work as e�ciently as possible.

You will most likely want to iterate repeatedly on a solution in order to improve the product to perfection, but your external team will be in tension with your desire for perfection. They will protest that a solution that meets the expectations, has been achieved, and any further iterations would be a scope change, which costs more money. Capturing expectations and acceptance criteria in adequate detail are powerful tools for navigating this tension. We should note that a time and materials (T&M) relationship removes this tension. However, the T&M relationship is inherently a win/lose. The more time the external team spends working on your software, the more they win and the more you lose.

Elephant #2Although the development team can be expected to be familiar with the principles of their �elds, they will need to be brought up to speed on the client's business and on speci�c technologies. They will likely not be experts in the problem space and will therefore not understand all implications of decisions. They also will not be familiar with niche technologies terminology, and regulations. Some time, e�ort and money will be spent on learning. In order to maximize the value delivered to you, make sure your development team documents these learnings and delivers them back to you on a silver platter.

Elephant #3As a project continues, circumstances can cause con�icts between partners. There will be misunderstandings, quality expectation issues, scheduling issues, unexpected expenses, and other con�icts. The business environment for you doesn't remain static during a long project. Budgets get reduced. Priorities and deadlines shift. New features are required. Key people get reassigned. Complications cannot always be anticipated by the development team either. Initial assumptions are proven false. Test results come back negative. New complexities are discovered. You, as the customer, must intentionally foster an environment where the inevitable obstacles in running a project can be exposed and solved. Don't create an environment where only "happy path" news is welcome.

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Elephant #1

Win/Win Software Services: Elephants and Methods

As you engage with your external team for each subproject, together, you must structure the engagement to solve the current highest priority of the project. Example priorities could be: proving a hypothesis, developing speci�c functionality, standing up a platform, inspiring some key customers with a demo, or meeting a milestone. Part of completing one subproject would be de�ning the next. As described below, you and your team will establish a set of processes that govern the work, but these processes can be tailored as required. A temptation is to skip meeting face to face because such meetings may require travel and expense. This is dangerous. Some level of dialogue together in a room is needed to foster innovation and to establish the trusting relationship needed for a win/win outcome.

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Think big. Let's de�ne a project as the activity of de�ning, building, and launching a product. The project is the big picture, and it’s important to not let high level goals to get lost in the daily work. The external team could be involved from the very inception of a project to its conclusion or at any time between those points. Start small. Organize projects into sequential subprojects or phases, each with their own scope and timing. The subproject must be de�ned to maximize value at an acceptable level of risk and cost. Each subproject represents the next immediate step toward the project goal.

Project Organization

The MethodNow let's return to the original question. How do we recommend structuring engagements between a customer and the development team that will foster win/win outcomes? We want to de�ne and deliver the project solution while meeting the business objectives of the individual partners and overcoming the elephants that pull apart the relationship, destroying any chance of value creation.

Win/Win Software Services: Elephants and Methods

Agile MethodologyWe have found that using the iterative and incremental approaches of Agile methodologies leads to successful results. Agile allows teams to scale fast and adopt to changes. Each subproject consists of one or more iterations, or sprints. Sprints are de�ned by a time box and a list of objectives, each with its own de�nition of being "done". The cumulative outcomes of these sprints builds into the project delivery. Stay tuned to the Twisthink blog as we share details on our "twist" on the Agile methodology in the future.

Twisthink follows a structured approach when designing new o�erings with its customers. As shown below, this approach starts with the HCD process to clarify the goal. When a critical mass of the goal has emerged, it switches to a realization process, where the product is implemented and matured.

The �gures below intentionally show an iterative approach where the �nal goal is envisioned and implemented as the project moves forward. Both the design and development teams contribute in the iterations, although the balance shift from design to development as the project moves forward.

In order to keep all team members synchronized on the common project goal, you must become an active participant of the sprints. You can then be kept informed, daily if desired, of the problems and progress of the team. You can also view the current capabilities of the product under development and set the priorities of activities targeted in the upcoming sprint.

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Win/Win Software Services: Elephants and Methods

Trusting RelationshipsThe di�erence between a good project and a great project is often the relationship between you and your external team. In the best projects, the parties act together in partnership. You and your team need to very deliberately develop the relationship, putting in place processes that build trust and synchronize expectations. Over emphasize what each party knows and doesn't know, capture the initial project de�ni-tion, begin setting up process expectations, and try aligning timing/budgetary expectations. Provide opportunities for the teams to get familiar with each other. Believe it or not, designers and engineers tend to have a few quirks. As Robert Frost said, "Good fences make good neighbors.” A good Statement of Work (SOW) document de�nes the “fences” for each phase between you and your external team. The SOW is where the scope, timing, assumptions, and terms of the subproject are de�ned. It can often take several iterations to get the content right, but di�cult discussions at this point help avert larger con�icts down the road. On a more positive note, this is where each party can verify their win/win business objectives are met. Some engagement paradigms include:

Fixed Scope/Fixed Fee Best for well-de�ned projects with clear scope and little technical risk

Managed Budget Hybrid approach where client commits to pay a �xed fee but retains the ability redirect activities and priorities

Both Twisthink and its customers will have their own process for doing design and development, for managing projects, and for managing organizations. There are times when our customers want us to adopt their tools and processes. There are other times when they aren’t interested in which process is used as long as the deliverables meet their expectations. Sometimes our customers begin using the Twisthink processes.

Be prepared for an honest conversation on what investigations and trade studies need to be done, what training is needed to �eld a quali�ed team, and who should pay for the learning. This will build trust. You will need to allow your external team to learn… and learn quickly. New technology stacks come out every month, so it is very unlikely that you can avoid all learning curves. You may not like paying for your external team to learn new things. Get over it. If it makes you feel better, remember that you are bene�ting from the experience gained on previous projects from other customers. The project goals and direction will continue to emerge as work continues. The ideas discussed during the initial project planning will grow stale and change as new realities are discovered. All parties involved in the project need to keep in sync, and a culture of engagement and trust allows this communication to �ow freely.

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Win/Win Software Services: Elephants and Methods

ProjectManagement

Process

OrganizationManagment

Design Process

DevelopmentProcess

Customer

Statement of Work

SoftwareDeliverable

CollaborativeFeedbackLoop

Communication is key

Pun intended. This one is basic but still needs to be communicated. Successful projects, especially larger ones, have multiple points of contact established between the partners. Connecting the right people for the right conversations boosts the e�ciency of a project. Consider a communication plan for whatever activities are necessary.

• Business/Account Management• Project Management• Technical• Design• QA/Test• Transition/Manufacturing/Operations

Set up regularly scheduled meeting that occur in the normal work of the project such as daily sprint stand-ups, sprint planning meetings, and backlog grooming meetings (more Agile terminology). Also, set up special meetings at key gates and milestones. Multiple person meetings are expensive, so your development team should help you drive e�ciency. Tailor the development process to mandate an appropriate level of formal communication. Obviously a quick proof of concept requires a di�erent level of communication than a production launch. You must de�ne mechanisms to communicate changes in requirements and timing expectations. Make sure you have tools to report bugs and close them. Formal release notes, test plans, and test reports help everyone remember results from the past. Although many industries are moving away from exhaustive requirements documents, capturing use cases (or user "stories") is a valuable tool for de�ning what a project "is" and what it "is not". Technical communication is vital for both designers and developers. The team needs a way to advance the design from conceptual sketches to wireframes to formal graphical assets and text strings without loss of content. Similarly, technical teams need hardware and software interfaces de�ned for their components to integrate into a larger system.

Continuous Improvement

There is always room for improvement. As projects move forward, we can �nd ways to work smarter. Be open to suggestions, but keep in mind that projects have momentum. Momentum grows with the age of the project and with the size of the team involved, so driving change gets harder with more momentum. Choose your battles wisely.

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Win/Win Software Services: Elephants and Methods

By working together, you and your extended team can create new business value through creative designs and technical innovation. There are always obstacles that cause friction in any relationship, and a client/service provider relationship is no exception. Any development project has multiple opportunities for con�ict. We continue to re�ne and improve our tools and process, and we believe that a win/win software services engagement can be achieved using the following principles:

Summary

• Organize the big project into smaller subprojects that can provide the logical next step toward

• Run each project under an agile methodology that provides the entire team with insights.• Foster trusting relationships using a partnership paradigm, collaborating to achieve the goal

• Structure regular formal and informal communication between various teams in the project.• Adopt improvements to the design and development plans where appropriate.

Project goals move. The team pursuing the goal needs to be able to think big, start small, scale fast, and act together.

ABOUT TWISTHINKTwisthink is a product innovation and business strategy consultancy that delivers game-changing technology solutions to bring new value to its clients. Through its approach to human-centered design and technical expertise in new and emerging technologies it gives life to unimagined possibilities for clients across automotive, medical, industrial manufacturing, consumer products and beyond. Twisthink’s team brings experience in embedded systems, vision systems, connectivity, UI/UX and Industrial Design. For more information about Twisthink, visit www.twisthink.com.

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the currently-de�ned goal.

within a win/win environment.

Win/Win Software Services: Elephants and Methods