At Data Decisions we practice Consulting as a Service. Consulting as a Service delivers tangible value to the customer similar to professional services while also providing the same insight as consulting. The advantage with Consulting as a Service to customers is known budget. The value to us is the scalability and the ability to engage customers with 1, 10 or 10,000 employees. Our goal is always customer success. Maintaining this customer focus without upfront pricing would be far more difficult to achieve.
Hourly billing: GOOD for consultants BAD for customers
Early in my career, something stuck with me:
Time worked has no inherent value.
Deliverables have value based on performance, as measured by the relative positive impact the deliverable has on a customer. A big misconception is that how long it takes to produce that deliverable is irrelevant to its value.
What companies are discovering is traditional hourly billing of software development rewards inexperienced software development organization by financing their learning curve. It penalizes true experts, who can resolve problems in a fraction of the time it takes a less experienced software development organization. An organization that uses hourly billing for system development as opposed to fixed prices exemplify an organization that has not been capturing, compiling and analyzing matter data throughout its history. Or worse, maybe it has no history to speak of at all! Or, even worse still, they see customers as a cash machine where they can bill by the hour ad-nauseam while delivering low quality or non-existent results.
How can fixed prices work?
Typical software development jobs leave the customer holding the bag until project completion. Delivering continuous value to a customer is critical and a methodology used to do this is called in the industry Agile. Agile is a continuous integration process that is defined broadly as valuing:
- Individuals and interactions: self-organization and motivation are important, as are interactions like co-location and pair programming.
- Working software: working software is more useful and welcome than just presenting documents to clients in meetings.
- Customer collaboration: requirements cannot be fully collected at the beginning of the software development cycle, therefore continuous customer or stakeholder involvement is very important.
- Responding to change: agile methods are focused on quick responses to change and continuous development.
The process has groups of developers using regular task focused teams called scrums. Data Decisions utilizes three person scrum groups. The number of scrums can be scaled given the current level of customer engagement. Each scrum billable unit hour is agreed to upfront with the customer and scrums are added or removed on-demand. The more scrum groups that are introduced to a customer, the more focused each scrum group becomes. Data Decisions has geographically distributed developers and geographically distributed teams. It’s intuitive to utilize the same methods within each scrum to scale up and connect separate scrums on the same project.
Consulting as a Service with fixed pricing puts the customer in control of their budget and project. We do this by providing the customer with an agile team able to scale development on-demand by modifying the number of scrums, the parameters of the scums’ engagement with a project, or even the entire project scope. This setup allows Data Decisions to know all costs upfront for any project and easily adjust if the project scope changes - as it often does. The incentive then becomes for Data Decisions to deliver a working system upfront and build ongoing one-on-one relationships with customers instead of looking for the next billable hour. The results for Data Decisions over the past 10 years we have been in business is an amazing 100% customer retention rate.
Contact Data Decisions today to discover how partnering with our Consulting as a Service teams can grow your business and better connect your business with your customers, potential customers, and employees.