Choosing a Custom Software Development (CSD) Partner – Don’t Fall for the Fluff

9 Sept

By Nathan Elsberry, CEO, Revenue Office Innovations

There are three, and only three, tiers of Custom Software Development (CSD) providers.

Capacity Tier
Average Tier
Premium Tier

Unfortunately, though, those three tiers have become blurred since the pandemic, with every firm competing for the same work and making the same capability, expertise, and differentiation claims.

As an example, I know a firm that is, and has always been, a Capacity Tier firm (low-cost, high-volume teams, low-quality delivery, no thought leadership). Being a Capacity Tier firm is NOT a bad thing; there are huge market demands for those “fingers on keyboards” firms.

The problem occurs when you see the effectiveness of this firm’s marketing organization and its ability to present low-quality capacity work as strategic partnership and client outcome ownership.

Nothing could be further from the truth, but when you read their press releases, website, case studies, etc., you would think they were the most effective and strategic firm in this industry.

4 Common Ways Executives Choose Vendors - and the Risks

So, if everyone pretends to be the same and inflates or manipulates their services, how do buyers select the right vendor or partner for their goals?

Many execs choose partners they or their colleagues are familiar with and have had success with in the past.

This is a great approach and one I also use. The only downside is, are they the same firm they were when you used them before? Have their priorities shifted? Has their focus moved into another industry, etc? Are your colleagues incentivized to refer them? Is the work they did before the same as the work you need now?

Other execs use outside recommendations from firms like Gartner, Forrester, and others to guide them towards a goal-achieving vendor or partner.

These firms are great at informing you and adding a kernel of information to your decision, but they shouldn’t BE your decision.

The people, the client cases, the research dataset, etc., that are used represent a fraction of the people and case studies/clients of a particular firm.
If I was reporting my profitability, would it be ok if I only showed you the top 3% margin clients for you to base your investment on?

Some execs gather proposals from a variety of providers and evaluate those before narrowing down to the final list that will come to pitch in person or workshop in person before the final choice.

This is a robust way to select your next vendor or partner. You get to compare the written approaches and considerations on paper before hearing them in person, and then get to interact with the team members themselves to see how engaging with that provider would actually feel.

How many of those presenters will be part of the actual program, if they win? Which of the technologists that you’ve interacted with will be on the program? From an exec support perspective, where do you rank on their existing client list? Why are they so much cheaper or more expensive than the other providers? Why does one firm say they will complete this in eight months, and the other says 18 months? Etc.

Even more execs make vendor or partner selections based upon current vendors.

Ex. If you are heavily engaged with one of the three largest cloud providers, there is often a big push by those cloud providers to use THEIR solutions, THEIR partners, THEIR approaches, etc.

This type of decision-making is akin to seeking the absolute best automobile for your particular application and then asking a company like Ford for their guidance in addressing YOUR goals.How often do you think Ford would recommend Chevrolet, even if Chevrolet had a better solution for YOUR goals? They won’t, because they are pushing THEIR goals!

Why One Size Doesn’t Fit All

Choosing the right software development firm is tough, and one size does NOT fit all. You will need multiple firms that will serve very unique purposes.

At ROI, we help buyers with informed, educated, and up-to-date choices when it comes to their partners.

We can help with:

Requirements development
Shortlist creation and justification
Commercial terms and negotiations
Comparison analysis of proposals and past performance
And more….

We also help you sift through the nonsense to get to the accountability and ownership stage.

i.e., We help you develop “skin in the game” terms for your potential vendor or partner to accommodate.

What Makes ROI Different

You should know, the service of helping a company choose a vendor or partner is not unique. NOT AT ALL. It’s also not unique to bring someone in with years of experience “sitting on the other side of the table” to help you.

What IS unique is bringing in a partner like ROI, who has: