Making the Case for Custom Development

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Making the Case for Custom Development

  • “I could get this done so much faster if I had an export tool.”
  • “Whenever I need to do an update my timesheet, I have to get an Admin to correct it because the webportal is difficult to use.”
  • “I can’t find anything on our poorly-organized document manager.”
  • “Our website looks terrible on a mobile device.”

At some point every company runs into issues like these – internal issues that reduce productivity, negatively impact client relationships, or hamstring employees from landing the next project.  These issues can often be resolved with a custom development solution, but the challenge is in convincing stakeholders to prioritize this need.  Often, customized development for internal use is viewed as “optional” or less important than customer-facing projects.  The effort required to build and implement a new or improved solution can even be written off as a needless drain on time and resources.  However, when more carefully analyzed and given a measurable value, there can be great worth – both for your employees and your customers – in investing in customized development for your company.

 

Monetizing Custom Development

One of the greatest challenges in convincing stakeholders to prioritize custom development intended for internal use is the idea that it isn’t as important as customer work.  It is easy to point to a contract with a dollar amount attached and understand how it will impact the company’s bottom line.  You can plainly see the balance of resources and the revenue gained.

But how can you outline the return on development created for use by your own company?  How can you attach a value to this effort that an owner, board, or shareholder can understand?

Like any other project, you can start by breaking it down by the numbers — weigh the cost and the benefits and express them clearly.  Don’t play down the fact that the biggest benefactor of the work may be your company’s own employees.  Your time and that of your colleagues has a cost for the company.  By investing in internal tools to create, update, and streamline processes — especially manual, tedious, or oft-repeated work — you are saving resource time.  Does the Accounting Department have to manually run reports?  Do your engineers have to deploy the same process scripts over and over to upload to a database?  Do managers copy and paste the same document formats for each project?

Start by calculating your current baseline cost.  How much time is your company spending on a particular task or process?  How many people would be affected by the change?  What are the resource costs for that time?

Next, break down the proposed change or changes.  What sort of tools or process updates would reduce this effort?  Most often, you want to start with incremental changes.  A smaller effort with a larger impact is easier to work with that a sweeping change that will take more time and resources to implement.  Working at the smallest viable level, what would be the difference in time spent between the current process and an improved process – over a day, week, month, or year?

As an example, your Accounting Department spends 10 hours every week running and compiling manual reports.  The cost of those 10 hours spent by the Accounting Team, when compared to their salary cost is roughly $1,500 every week or $78,000/year.  If the team had a tool that exported the reports needed at the push of a button, hundreds of hours could be saved.

Next, you need to determine the plan and plot the costs to develop this process and implement it.

Continuing our Accounting team example, you are able to determine it would take approximately a $50K effort to create the tools needed to generate the reports in minutes instead of hours.

Calculate the net benefit by comparing the improvement costs to the cost savings.  Determine what (if any) immediate savings there would be by implementing the improvement.  Then determine the rollover savings from period to period.  How long would it take for the company to recoup their investment?

Back to our Accountant example, the cost of the new reporting solution would save the company $28,000 in the first year and the cost of the development would be recouped in roughly 8 months.  For each subsequent year, the cost savings would be $78,000!

 

Leveraging Commercial Software

Another option to consider if your costs are running high is starting with an off-the-shelf solution and then asking a development company to further customize it for you.  Did you find an application that does 80% of what you need?  Is it only that last 20% holding you back?  What would it take to fill in that gap?  Most commercial software has the ability to overlay additional functionality on top, knowing that users will install their own Apps and Plug-ins.  If you can reduce the amount of base development needed, does that close enough of the cost gap?

 

Priority Based on Quality

But what if it is more than just a time issue?  What if the quality of the current process is the problem?

How can you make a case for custom development work when the monetary costs are higher than the expected returns?

Consider:

  • Are there other quantifiable areas that would be impacted by the improvement that could make your case?
    • Would implementing an improvement result in reduced customer issues?
    • Could a change in the process free up business resources such as bandwidth, server space, resource time, etc?
  • Are employees capable of completing the work required of them with the current process?
    • Are your employees overwhelmed because your current process isn’t scalable?
    • Is the current process error-prone?
  • Who is impacted by the inefficiency of the current process? Does it impact more than one person or department?

Using these considerations, you can create an Impact Analysis.  An Impact Analysis will allow you to capture and structure all the likely consequences of a decision and more accurately understand if there would be value in investing in your internal-use development.

First, clearly define what you want to achieve by implementing the development work.  For example, you wish to add more self-service options to your customer care portal.

Then break down the potential impacts of the change.  You can do this by evaluating the impacts from an organizational perspective or determine the importance the changes would have on your company values using the McKiney 7Ss (Strategy, Structure, Systems, Shared Values, Skills, Styles, Staff).

Next, evaluate the people and organizations affected in detail.  Then go down this list, identifying both the positive and negative impacts of implementing the changes.  This detailed outline will give you a balanced view to weigh whether if it makes sense for your company to invest in the effort or not.

 

Changing the Use Case from Internal to External

If selling the desired development as something for internal use isn’t something you can get any traction on, is there a way to change the expectations for the work into an external benefit?

  • Could an enhancement created for internal use be turned into a customer-facing product?
  • Is the work you are championing something that a partner company could use?
  • Is there a way to leverage the development to make it easier for your company to connect with potential clients?
    • Would doing the development make it easier to convey the services your company can provide?
    • Could this effort be used to streamline how potential clients can reach the right people?
  • Would producing this application be something that could be recognized in a trade journal to provide name recognition?

 

As an example, would an update to the forms on your databases open the door to give customers more self-service form options?  Would an update to your company’s email client allow customers to reach out for additional support?

Changing to an external focus may give you a very different result when you run your cost and impact analyses again.

 

Closing

Understanding how to articulate a good case for investing in custom development is a key step in getting the idea off your wish list and into your hands.  By arming yourself with measurable criteria and clearly defined impacts as justification, you can sway stakeholders to see the value in investing in custom development for your company.

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