How Outsourcing Software Engineering Services Impacts Product Delivery
Evolution of the concept of value
The concept of value has a long history before becoming a meaningful part of the software development process.
Components of true business value
Software creators always pay significant attention to functional value, as both developers and users care a lot about a product’s functionality. Service value, in turn, is sometimes sacrificed for the sake of functionality.
Yet, the value that the project team must enhance to ensure effective product development and growth is always composed of both these components:
Why service value is important
“The more functionality you implement, the more legacy code you need to support and, therefore, the higher the maintenance cost. This is why it’s important to distribute a team’s efforts proportionally between the project’s functional and service value.”
Let’s assume we have a project where the relative cost of maintaining existing functionality doesn’t grow with time. Still, the more iterations we release, the more legacy code we need to support.
Distribution of product funds with a stable maintenance cost per iteration:
Why service value is important
The older your code gets, the more resources you’ll have to spend on its maintenance. If we assume that for each next version of the product the maintenance cost will increase by 10% from the cost of maintaining the previous version, the overall picture changes significantly:
Distribution of project funds with an increasing maintenance cost per iteration:
Why service value is important
Keep in mind that project budgets aren’t limitless. Let’s assume we can’t exceed the initial budget by more than 20%. In this case, the situation with distributing project funds will soon get complicated:
Distribution of project funds with a limited budget overrun level:
Why service value is important
With each iteration, the possibility of implementing the expected volume of functional value decreases. Let’s compare the cumulative volume of implemented functional value to the expected numbers:
Comparison of actual cumulative functional value produced to expected cumulative functional value:
Why service value is important
Service value is often exchanged for functional value, especially at the early stages of product development. When the decrease in development speed finally becomes noticeable, the most common solution is to hire additional staff and, therefore, increase the budget.
Let’s see how this would work if we, say, doubled the budget at the sixth iteration:
Distribution of project funds with a doubled budget starting at the sixth iteration:
Why service value is important
Is increasing the service value worth the effort?
Let’s assume that in order to completely eliminate the growth of maintenance costs, we need to invest equal money into functional and service components.
At the same time, around 10% of the overall investment in each iteration will go to some sort of bugfixes. In that case, the general picture will look like this:
Distribution of project funds with equal spending on functional and service value:
Why service value is important
For a product team, the thing that matters most is usually the product they have today and not the one they’ll be working on in six months or a year. Therefore, prioritizing service value gets challenging.
What can you do in situations like this? There are two major options:
- Adjust the team’s perception and switch their focus
- Hire an outside development team
Improving a product’s value by outsourcing engineering services
Leading software engineering outsourcing companies understand the importance of non-functional value. Cooperating with one of these companies can help you improve the overall product business value with minimal efforts.
Such a company has three main goals
- Establish a stable and predictable flow of new and useful functionality
- Make sure the developed product meets the client’s quality requirements
- Stay within the time frames and budget determined by the client
How to determine whether an outsourcing company is professional
What distinguishes a professional external software engineering team is that they do exactly what you want while focusing on the things you need to successfully deliver your product.
There are several aspects you need to pay special attention to when looking for a software engineering outsourcing team:
As we find out from our overview, cultivating a service value-centered culture in an in-house development team takes a lot of time and effort. Outsourcing your project to the right external team sometimes can help you get the best result while staying within your deadlines and budget.
Read the full article about how outsourcing software engineering services impact product delivery on our blog.
