Getting Work in IT

George Kocur

November 2003

Courtesy of GeorgeKocur. Used with permission.

IT project acquisition: small project

• Small (1-3 person) projects for business software can be obtained with an approach similar to the other speakers’

–Good track record –Responsive proposal –Experience with current technology –Good communication –Flexibility, though not to the point of being taken advantage of •Requirements need to stay fairly firm •Change process has much potential for contention •Build the expected changes into your bid so you don’t have to negotiate them constantly

Small project, continued

• Exit strategy -Continue to provide support at a fixed or vari

able price -Turn over software to in-house maintenance -Third party software maintenance companies

gone, so they’re not an option• 90% of cost of software project is its lifecycle

or continuing cost -With a few lifecycle projects, you won’t have

capacity to take any new work

Medium size projects: off the shelf

• Companies are looking for off the shelf solutions as much as possible these days, with minimal custom development

–Custom development necessary in: •Cutting-edge areas •Niche markets •Rarely, in large companies for cost/license savings

–Many projects are a mix of off the shelf software that is configured, plus some application specific development

• If there is a substantial amount of application development, it will likely be done offshore • Role for domestic software people will be requirements, design, management

Medium size projects: certification

• Companies are not insisting on CMM or ISO 9001 certification in the US uniformly, but this is quite common in Europe and Asia

–If you work with or manage a small firm, consider CMM and ISO certification strongly

–Increasingly, governments require it –State and Federal governments often have contractor/vendor ap

proval processes that can be tedious. You may have to through the process.

• You can often be sheltered from this by subcontracting to a larger company that has approval. • This is becoming ‘table stakes’ to participate: you need a good software process that is documented and certified

Medium size projects: marketing

• Proposal preparation suggestions of other speakers are right on for IT also

–Creativity, responsiveness, communication• Companies often rank IT suppliers in three categories: –Strategic. Selected for core projects of high importance –Preferred. Selected for important projects –Basic. Selected for routine projects• Companies continually try to reduce the number of IT suppliers –Typical large company has several hundred. Reduces ranks by

100 every couple of years to offset growth. Similar proportions for medium size companies

–Some small, new companies are strategic; some big, established companies are basic

–Integration and lifecycle costs drive supplier reduction

Medium size projects: marketing, cont.

• Key factors in obtaining IT projects –Economic value:• High performance at low price.• Supplier commitment to customer, willingness to meet needs –In absence of performance margin, price becomes the determin

ant for choosing an IT vendor• Commodity level thinking, won’t make you a strategic vendor –Mutual commitment to continuing improvement• Company must be open, share info and plans and include vend

or• Vendor must do the same –Metrics. Prove the value of current, past projects with other cu

stomers• Visibility, monitoring, high service level

Medium size projects: marketing, concluded

• Key factors, continued: –Individuals buy, companies merely pay• Develop strong relationships with the customer –Competition will be created by the company periodically• Reassess performance, invite competitors to bid• Be aware of what your competitors and the industry are doing –Credibility. Deliver on your commitments, especially early in th

e project when it’s often the hardest due to customer delays• Stay away from change request hassles, delay requests. Build t

hem into your price.• Use a good software process • Hold your customer, nicely but firmly, to requirements –Use components, third parties. Don’t reinvent the wheel.

Products

• Software customers strongly prefer products over custom solutions

–Spread lifecycle cost (90%) over multiple customers –More likely to stay with current software technology –More likely to keep up with industry changes• Building a product: –Modify custom software built under contract to a cus

tomer.• Be very careful in negotiating contract terms –Angel funding (mom, dad, …) –Venture capital funding

Products, continued

• Unless a product is revolutionary, its success is strongly based on a very practical understanding of the industry and processes that it seeks to serve

• Extending and generalizing custom software is very attractive in many cases

–Can be self-funding –Allows principals to retain control –Maintains natural ties to industry –Limits speed of growth and size of product

Products, continued

• Angel funding –Often a few hundred thousand dollars from i

ndividual investors –Often relatively few strings; they rely on your

intelligence, hard work and integrity to ensure success

–It’s terrible to lose your family’s and friends’ money, so you will indeed work your tail off to at least pay them back

–In some cases, this is a necessary, valuable boost to your self-funding

Products, concluded

• Venture capital funding –Larger amounts of money (millions for first round, s

ometimes) –Formal, difficult process to obtain funds –Difficult to maintain control of company –Appropriate in some cases when speed to market an

d rollout of product/hardware is essential.• Need a large potential market• Venture capital expects 10% of ventures to make lots

of money, offsetting the 90% that don’t: the deals are essentially structured that way.

Building a product

• Software –Good idea –Good people –Good software process –Good tools and platform• Corporate functions –Good marketing and sales• Select appropriate, addressable channels, markets• Leverage existing VARs, integrators, consultants, … –Ability to negotiate well with customers