A man consider between two options

Product Focused vs. Project Focused: What better option to outsource your project?

Jan 12, 2021 | Blog Post

We have seen two fundamentally different philosophies on how companies interact with their software during years of working with our clients: the first we call project focus, and the second we call product focus. Choosing a philosophy for your business will affect your product, company, culture, and customer experience.

Project Focus

Project Focus is an approach that sets specific, predefined goals with a clear deadline and budget.  A software product with such a focus is governed by the “Iron Triangle,” meaning the quality of work is constrained by the project’s time, scope, and cost, irrespective of the value being delivered. A project is considered successful when getting all its work done within the planned time and budget.

The origins of this approach can be traced back to 18th-century engineer Henry Fayol. Soon it became the standard for evaluating projects during the Industrial Revolution. And it proved to be quite successful given the economic and social environment at the time.

Industrial revolution style management is still being used today in the software industry. If you’ve ever used a “Gantt Chart,” you are using a system that was invented in the early 19th century to manage the time, scope, and cost of projects.

Product-Focus

Product-Focused refers to a system in which a company assigns ownership of a product to an internal team. The team’s performance evaluation is tied to the long-term success of the product in the marketplace. In this model, the product team will continually seek to improve and develop the product based on the changing market.

This management philosophy dates back to 1931, when Neil McElroy, then the president of Procter & Gamble, evaluated how to differentiate Camay soaps from their competitors. He defined a position called “Brand Maker” as the person responsible for all aspects of the product, including sales, product development, and marketing.  This was absolutely revolutionary when most companies followed Henry Ford’s philosophy of treating employees as interchangeable widgets.

And it worked! Procter and Gamble found that a product-based management approach resulted in higher quality products that commanded a premium price in the marketplace.

So which is better?

There is nothing inherently wrong with a project-based approach. You’ll have peace of mind that your project will be completed on time and within budget. Oftentimes with internal software projects, this approach is necessary. 

But this leads to a lot of problems when you outsource a software development project. Experience has taught us that there are several downsides:

  1. This approach requires spending a lot of time creating a scope of the work contract that details all work, timing, budgets. Since these contracts take a long time and cost a lot of money in attorney fees, they tend to cover a big piece of the project scope, often the entire thing.
  2. However, today’s software business environment is changing very quickly.  What happens if two months into the contract, a competitor comes out with a better version of what you had planned to build, and it fails? Do you continue to follow the contract knowing that it is unlikely to work in the marketplace? 
  3. Furthermore, experience has taught us that initial Scopes of Work always miss some requirements, no matter how detailed you get and how experienced you are. Often the requirements that are missed are critical in creating a commercially viable product.  So what happens in this situation when you have a project-based approach? Generally, it means that you have to do a change order to the contract, and you end up spending far more than you had initially planned.

Put another way, “A perfect project management system can complete every task … in a vacuum, with amazing results — and still fail when it comes time to go to market,” said Alexander M. Kehoe, operations director at Caveni Digital Solutions, a web design consultancy.

Consequently, CodeStringers is committed to following a product-focused approach. We often call it “delivering value to the customer.” We want our success to be tied in with your success.  Our primary goal is to work with you to build a product that will make your company more financially successful.  We keep this goal in mind in everything that we do.

Conclusion

There are two different approaches when it comes to software development: project focus and product focus. Although there are situations where project focus may be needed, we believe that 99% (wanted something stronger than most”)  of our clients benefit from a product focus as it leads to a better outsourcing relationship and ultimately a more successful business for our clients.

If you have a software development idea, please contact us at the contact information below.

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