Waverley Blog

Had the funniest thing happen with a new business lead just the other day. We’ve been working with a number of great people at a big name design firm for many years. We’re good friends with these people, and each of us are always looking for ways to either send business to each other, or figure out a way to work together on something. Usually these types of connections result in referrals for new clients and projects. We get most of our business this way, and it’s worked great for years.

I received a call from someone new at this design firm about a new client project. It sounded great, and we quickly found a way to work together on it. I was told that they heard about Waverley from another company they work with occasionally. I assumed this was yet another case of the work we do with so many companies in the Bay Area resulting in new business. It was a little odd that the referral didn’t come from inside the big design firm.

Later I mentioned this to my partner Matt, and he pointed out something surprising. Turns out, our friend at the big design firm had referred Waverley to the smaller company for a project some time ago, and that discussion lead to numerous meetings and opportunities. Now the smaller company was acting as the referral source back to a new contact at the large design firm that we’ve already worked with for some time. Just goes to show again what a small world this really is, and it all just goes around in a big circle.

In the beginning of each project there is the contract. The terms of that contract will have anticipated and unanticipated consequences: in the project’s cost; in the project’s timelines; and, too often, in design decisions. Many companies enforce a fixed-bid contract when engaging with outsourced software design and development. Unfortunately for both parties, traditional fixed bid contracts treat software development and design in the same way they treat a manufacturing process, as if there is a knowable, fixed cost to developing something new and original. The fixed-bid creates a bias toward software development processes that encourage strict adherence to the initial design plan, rather than a bias towards the best design for the needs of the buyer. This mindset also increases the likelihood of missed deadlines and cost overages.

However, there are some strategies that can be employed to accommodate the request for a fixed bid, without giving up design flexibility. For example, with one of our larger clients, Waverley utilizes a multi-stage strategy where we divide a large deliverable into small fixed bid milestones. Each milestone is one to two months of work and begins with a short design phase.  Working together we create purchase orders for a time and materials fund to cover design and analysis work.  The upfront T&M work allows agreement on the upcoming milestone and fixed bid the work with a clear plan that is achievable with minimal risk.

Minimizing schedule risk is one of the biggest factors in creating fixed bid contracts that make sense. In order to make this successful, it’s important to establish confidence from the buyer perspective, so they can see and trust a large scale plan to provide a long term deliverable across several smaller stage milestones that meets their requirements and costs. This is especially true for Agile development in particular.   The project overview can be discussed up front with goals for each milestone and a general understanding of what resources and budget will be consumed to satisfy the long-term requirements of the buyer. With each milestone, risk is reduced and the working relationship benefits from the confidence created during the T&M design phase

Last week, Waverley attended it’s second MSVP vendor summit at the Microsoft campus in Redmond. Like almost everyone else, Microsoft is working hard to manage and reduce costs more effectively and get the most out of the dollars they spend on their vendors. Comparing what’s going on at Microsoft to some other large companies we work with, we see some trends.

Providing services to large companies is going to require more effort on the part of both the procurement departments, the consumers of the services provided and the vendors they work with. Procurement processes will face increased standards and solutions will need to be scalable across groups when possible. In order to control costs, large buyers are centralizing procurement functions and instituting policies regarding RFP’s and PO’s that help ensure buyers are getting more for their money. Governance will be more important than ever. I expect all vendors will have to provide more information to justify costs, work to creatively address the needs of their customers and actively drive their customers to find new ways of doing more with less. Buying in bulk will become more common and those vendors that can be flexible and scale have an advantage. Operational excellence has been and continues to be critical to the success of the vendor/buyer relationship. I expect the buyers of services to work harder to learn from their vendors and not just buy bodies to fix problems. I also expect more limited strategic vendor relationships. Standing still has never been a path to success and will be even less likely to work in this economic environment. Competition is going to drive relationships to be more effective and productive and the innovation that results should improve our mutual interests. We’ve always worked hard to have the best people, management and process and I think that effort should pay off for everyone.

Successful software projects are the result of lots of hard work and great communication. Great communication happens when partnered teams are listening to one another and working with great intentions and great motivation. Sometimes, it’s important to get together periodically to make sure the intentions and motivation are not taken for granted. We recently traveled to Romania with a partner to talk about project details. However, in the words of the partner, team building was the real goal of the trip, and any other accomplishments were viewed as extra benefits. As part of our team building, we traveled to a few locations in more picturesque parts of Romania and had fun eating and spending time together, learning more about each other and having a good time. A photo from our adventure is included here.