Overcoming the Challenge of Unaffordable Development Costs

  • Overcoming the Challenge of Unaffordable Development Costs

At Monita Analytics we have developed a new way to view, analyse, manage and deliver projects, which will become the future standard in project delivery.  Our platform uses behavioural analytics to predict the outcome of projects.

We look at what has and is happening in projects across all industries to determine what events, actions and decisions produce particular outcomes.  Using this information, we create behavioural models that we apply to current projects, allowing us to predict outcomes, identify risks and support decision makers in delivering successful projects.

This breakthrough in combining the worlds of projects and predictive analytics was made possible by the way we define projects, which enables us to objectively measure the performance of projects, organisations and individuals.  This has not been possible to date as existing systems are not capable of accounting for subjective factors such as change in scope, poor design, unforeseen circumstances and inadequate resourcing, to name but a few.

In addition, and perhaps the most exciting and unique benefit we provide, is our ability to take a person’s or organisation’s performance, to remove factors outside of their control, and present a true and correct picture of their actual performance based solely on what they have actually achieved.  This approach is revolutionary and will allow people to control and build their reputation in a way that has not been possible to date.  Monita’s platform will lead to people and organisations being more engaged in delivering a project as they now have something measurable and highly valuable to gain from its success, which significantly increases the chances of project success.

What is not unique to Monita is the challenge we are facing in trying to expand our team and recruit people with the skills and experience we need to build and grow our startup business, particularly in the area of software development.

Talent Crunch

There is some comfort in the knowledge that we are not alone in grappling with this challenge.  A recent survey of 700 US startup founders revealed “Hiring good people” to be their leading concern, by some distance ahead of no. 2 (“Acquiring customers”) and double the weighting of “Raising capital”.  Here in Ireland, we are well aware of the barrier to growth presented by the scarcity and cost of software developers in particular.  This so-called “talent crunch” is likely to remain a feature for the foreseeable future, when one considers that Ireland produces just 1,900 computer science graduates yearly (30% of whom emigrate, 30% of the remainder taking up employment in the Financial Services sector).

Outsourcing

This constraint is leading to Irish startups increasingly looking to place some of their early stage software development work with third parties, be that freelance, agency or full-service providers located here either in Ireland or abroad.  As is the case with Monita, this approach is generally a short-to-medium term solution to the “talent crunch”, pending the development function being brought back in-house once the startup has the financial capacity to scale up its team.   

Our search for a suitable partner was led by our CTO, Johan Swedell, who has 15 years’ experience in the Irish IT Services industry.  Johan has implemented several outsourcing programmes for early-stage and established Irish companies to IT service providers across Eastern Europe.  Our outsourcing experience to date has delivered several benefits:

  • Cost Savings: Daily rates are 40-70% lower than comparable Dublin rates
  • Enterprise Grade Applications: Our partner has a deep bench of skills and experience across a wide range of modern technologies
  • Code Quality: The code written for Monita has proven to be very reliable and efficient, reflecting the depth of capabilities, the culture of ongoing training & certification and low turnover rate of our partner
  • Scale & Flexibility: The firm has over 50 programmers, allowing its clients to upscale and pivot quickly
  • Accessibility: High levels of English proficiency and nearshore location (GMT+2 hours) facilitate good communication
  • Assurance: Our service provider places a strong emphasis on the confidentiality and security of Monita’s IP and data.

Always Learning

There are always going to be learnings for any company placing part of its product development process in the hands of an overseas vendor.  Our advice to those considering this option is to view outsourcing as a competency in itself and not just as a 'box ticking' exercise.  It pays to invest sufficient time in ensuring appropriate operational and governance processes are in place from the outset. Other points we would make:

  • Understanding Your Business: While some responsibility for success rests with you in ensuring your objectives are clearly understood, you need to be satisfied that your provider has allocated sufficient resources for knowledge transfer.
  • Pricing: Adopt a pricing model that best suits your internal capabilities, your budget and crucially, the level of (un)certainty you have upfront on your requirements.  Our partner works to a ‘time & materials’ model whereby it provides Monita with development resources that work under our direction.  Alternative pricing options in the outsourcing marketplace include: I) ‘fixed price contracts’ where the outsourcing firm takes responsibility for overall project delivery and takes on the associated risk, and ii) ‘fixed budget’, a hybrid approach whereby time & budget are fixed upfront, but where scope is continually reassessed as work evolves such that risk is shared between the two parties.
  • Development Approach: Most startups will require a vendor that delivers to evolving business requirements and product design.  Our partner uses the agile development approach that is predicated around repeated two-way interactions over the course of the project.
  • Expect Some Quizzical Looks: “How could you place a critical part of your business in the hands of someone thousands of miles away?” Our response to such questions has consistently been:
  1. Yes, software development is a critical part of our business, but it is not an area that gives us a competitive advantage.
  2. Outsourcing is something that our management team is good at.
  3. We did our homework.  Outsourcing is the most important strategic choice we have made to date, as reflected in the time and capital we invested in the process to date.
  4. The perceived stigma surrounding outsourcing by startups is lifting.  In the US, 60% of startups outsource their software development. 

Like any commercial engagement, if you are clear from the outset about your objectives and requirements, and translate that clarity into rigorous selection and due diligence processes, then you will be able to identify and manage the risks involved with outsourcing.

If considering outsourcing as a solution to your development needs or just starting down the road of planning your product development, feel free to contact us we would be more than happy to share our own experiences with you.

Mark Smillie, CEO, Founder Monita Analytics Limited, E:  marksmillie@monita.ie