What Added Value Can A Software Development Company Bring To A Product Owner?

What Added Value Can A Software Development Company Bring To A Product Owner?

8 min read


Evolution of any software product goes along with evolution of the product owner’s business. As the business evolves, so do its needs and values.

We believe no one else can handle it better than a professional software development company, responsible for ongoing development and regular delivery of your product.

Let’s see what added value can a reliable software development partner bring to a product owner at each stage of product evolution.

Stage 1: Idea
You have an idea of a product or service and you need to turn it into a consistent business plan.

At this stage the main value you can get from a software development company is its technical expertise. It is important to verify the feasibility of your idea and wisely choose a technology stack that will help you to achieve your business goals in the most efficient way. This first communication becomes an important step in building relationship with your future software development partner. We discuss business goals and constraints of your project, monetization and target audience, supported platforms and devices in order to form a coherent set of project documentation to begin with.

Stage 2: Beginning Startup
You have a business plan and consistent vision of the product, and you need to develop a Minimum Viable Product or MVP to enter the market. So the value focus shifts from technical expertise to talent – people that can actually implement your product.

Here you’ll face a choice: assembling an in-house IT team, hiring a freelancer, or outsourcing software development to a reputable company. In the first case, you’ll have to address a lot of additional things, like hiring and motivating your employees, organizing office space, building work processes, purchasing all required equipment, devices for testing, and many other matters. It all takes lots of time and effort, and so distracts you from your main goal – satisfying your users’ needs!

A deeper look shows that hiring a freelancer doesn’t help much in this regard. However, working with a professional software development company does really solve the vast majority of these problems. Your software partner provides everything required to start the development right away, minimizing your product’s time-to-market, and cuts many unnecessary costs thanks to sharing. It is a real solution for a limited budget, which is a common issue with software development for startups.

Stage 3: Experienced Startup
Eventually, your MVP is released. You may open Champagne and celebrate, but your product’s life doesn’t stop at Version 1.0. It’s just the beginning of its evolution. There are new users with new devices and new requests, new competitors appear on the market, new features and business ideas are put forth by you as the product owner. Successful launch of the product becomes the basis for further ongoing development.

You have a software product that is accepted by the market. The main need is a reliable professional team to perform ongoing product development, so the value brought by your software development partner, namely technology expertise and talent is now accompanied by teamwork. The software partner can respond to your growing needs in many ways:

  • You get full-cycle product development
  • You get a project manager as the single contact window between the product owner and the team
  • The project knowledge is kept within the team
  • Your team can be scaled rapidly along with your business; the personnel can be quickly replaced in case of need
  • You can easily involve your software partner’s experts for consulting and one-off jobs
  • Your software partner is reliable; they have reputation and professional approach to information security

Thus at the end of the day you can once again concentrate on your business and satisfaction of your clients’ needs, while all the technology and development matters will be handled by your software partner!

Stage 4: Established Company / Enterprise
As your product develops and wins new and new market shares, it becomes not only technically complex, but correspondingly follows your organizational structure. Multiple stakeholders appear, and many teams collaborate on development and promotion of the product.

On top of this technological and organizational complexity, the market starts to have very strict expectations regarding your product (just imagine Apple doesn’t release the next iPhone in September), so the main need at this stage is a regular delivery of your product.

In order to manage this complexity and guarantee regular product delivery under these circumstances, the biggest value your software partner could offer is top-notch processes organization.

This is an essential component which can make even the most talented and skilled team predictably efficient.

Now let us illustrate this evolution with one of the most famous product companies in the IT history… Yes, we mean the evolution of Apple. At first, there was Steve Jobs, who wanted to create a personal computer for everyone. That was his idea stage, when he needed to find out whether there were technologies which would allow him to implement his idea. Therefore, he learned about state-of-the-art technologies from HP, Atari, and Xerox. He found the basis for the opportunity. After that, he co-founded Apple with Steve Wozniak, who was the required technical talent. Basically, they created a startup and made an MVP, the first Apple computer to test the market. Then they developed the company and became experienced startup owners who started getting feedback, reported issues and suggestions from their market. The strength of Apple was divided into rivaling teams that worked simultaneously on Lisa and Macintosh. They had to be better than each other. They had to be fast enough to release new versions, react to competition and retain their customers. At some point Apple reached the level when the market had very strict expectations regarding their major products—Macs, iPhones, and iPads—and this is where they are now. Just imagine there would be no new iPhone in September. It would be something unheard of, and Apple stocks would plummet for sure. No, Apple cannot allow that to happen; they have a number of complex and effective processes to guarantee ongoing delivery of every major product. They won’t compromise their leading positions on the market.

Now let’s see how all this value is provided to you. Let’s return to the evolution chain.

Evolution And Engagement Models

This time you can see corresponding engagement models and optimal contract types for each stage. We suggest the following ways of collaboration that proved successful from our experience:

Stage 1: Idea
At this stage you get crucial information through consultancy, which includes:

  • Free consultation with a sales manager
  • Business analysis
  • Technical analysis UI/UX design estimate
  • UI/UX design & prototyping
  • Approximate software development stage estimate

Stage 2: Beginning Startup
If you need to implement your one-off MVP project, there are two general ways to do it:

Fixed Price contract

  • Works well only for relatively small projects with well defined requirements, UI/UX design, and acceptance criteria
  • You expect little to no changes, so the waterfall-like development model can be applied
  • Most risks are handled by your partner, but the final software development cost is usually higher than in case of Time & Materials

However, in our ever-changing world, trying to specify everything from the beginning can turn into a waste of time, especially for the complex time-consuming projects. In this case the best solution could be a…

Time & Materials contract

  • Works best if you value flexibility over precision of budget planning
  • You can have a quick start even with incomplete or fuzzy requirements thus minimizing time-to-market
  • Lean and Agile methodologies are used to implement your project iteratively, making it change-friendly
  • Risks and responsibilities are shared and documented

Stage 3: Experienced Startup
Likewise, there are two possible options here:

Time & Materials contract can be used for relatively small or irregular tasks.

But the most valuable approach is Dedicated Team contract which has most of the Time & Materials advantages and is much more suited for ongoing delivery of a turn-key product thanks to:

  • Persistent team allocation and knowledge keeping; this allows optimal team efficiency and time-to-market
  • Full transparency of actions, decisions and responsibilities
  • It suits well if your budget is planned per month or per week

Stage 4: Established Company / Enterprise
Dedicated Team contract is usually the only viable solution:

  • You get a full-cycle product team—or if you already have a core team, it can be quickly extended
  • In the latter case, the team must quickly integrate with your company’s structure, release cycles, development processes and tools
  • Therefore, the maturity of both parties must be comparable
  • Like in the previous case, it suits well for projects with monthly budget (here is a good example: ongoing ERP system implementation for a B2B product company with 20 years on the market)

Do’s And Don’ts For Product Owners

Our story can be summed up with several do’s and don’ts for product owners:

  • Value the power of communication – this is the key!
  • Manage expectations carefully.
  • Be involved, open-minded and responsive with your development partner since no one knows your product better than you.
  • Let your team know your goals. This will make everyone more involved and motivated.
  • Visit your team personally. This works like a charm in case of any misunderstandings or communication issues.
  • Keep in mind the cost of changes, do important things first.
  • Every software product is like a living organism. It keeps changing as long as it’s alive, so buckle up for a long drive and choose your software development partner wisely!
  • Enjoy!
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