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

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

    By Christian Schraga

    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 a methodology that establishes specific, predefined goals along with a clear deadline and budget. In this approach, a software product is governed by the “Iron Triangle,” which implies that the quality of the work is limited by the project’s time, scope, and cost, regardless of the value delivered. This model measures success by completing all the work within the set timeframe and budget.

    This approach has its roots in the work of 18th-century engineer Henry Fayol. It quickly became the standard for evaluating projects during the Industrial Revolution. This method was quite successful, considering the economic and social context of that era.

    Industrial Revolution-style management continues to be employed in the software industry today. If you’ve ever used a “Gantt Chart,” you’re utilizing a system developed in the early 19th century. This system was designed 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 overlooked requirements are crucial for 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 aim to align our success 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. We believe that in 99% of cases (a stronger assertion than ‘most’), our clients benefit more from a product focus. This approach fosters a better outsourcing relationship and ultimately leads to greater business success for our clients, though there may be instances where a project focus is necessary.

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

    CodeStringers

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