Discover key factors and expert tips for comparing software consulting firms in our comprehensive guide, ensuring the best fit for your business needs & goals.
Table of Contents:
- Unlocking Success with a Software Consulting Firm
- Six Key Factors: Choosing a Software Consulting Firm
- The Importance of Experience and Wisdom in Consulting
- How Subject-Matter Expertise Affects Project Outcomes
- De-risking Projects Through Business Process Mastery
- Human-Centered Design: Prioritizing User Experience
- Choosing the Right Size: Boutique vs. Large Consultancies
- Balancing Price and Value in Software Consulting Firms
- The Winning Formula for Choosing Your Consulting Firm
Unlocking Success with a Software Consulting Firm
There are a million software consultancies out there to choose from. Some are good. Some are bad. Most are middle-of-the-road.
A 2012 study by Gartner shows that only 16.2% of “IT Projects” (mostly software implementations or custom software development) were “completed successfully”. Author links open overlay panel Adam Alami, and Abstract With developing technological possibilities. “Why Do Information Technology Projects Fail?” Procedia Computer Science, Elsevier, 4 Oct. 2016, https://www.sciencedirect.com/science/article/pii/S1877050916322918.
Easy math says that this leaves nearly 85% of projects completed unsatisfactorily or not at all.
The primary drivers in these failures are listed as follows:
- Unclear objectives
- Unrealistic schedules
- Shifting requirements
- Misaligned teams
- Unexplained causes
Startups have an even higher failure rate – roughly 90% within the first 5 years in business. Their key drivers for failure: lack of product-market fit and undercapitalization.
What do we do about this? Do we throw more money at the problem? No. That Gartner study showed that the higher the budget, the higher the failure rate. Even well-funded startups still fail at a rate of 70%.
Do a little root-cause analysis and we get to a steel thread binding all these things together: Team capability within the consulting firm.
Team capability and strong team relationships address 5 out of 5 of those issues. I’ll take those odds.
Many businesses don't have experienced software leaders, so they’re likely to need external expertise – capacity, capability, or cost will play important factors in this decision. Choosing the right software consulting team is a crucial decision that greatly impacts the success of your project. With so many options available, how does a business leader decide which software firm to use? How do you increase the odds of success in your projects and achieve goals?
At Anthroware, we’ve distilled the factors down to six important points, presented in order of importance.
Six Key Factors: Choosing a Software Consulting Firm
When it comes to software consulting firms, the options can seem overwhelming, especially with the recent introduction of AI and Large Language Models (LLM). I'm sure many people nowadays are wondering if they should go with an app development company or strictly an AI company. With a staggering number of software product research and development projects failing to meet expectations, it's critical to choose the right software partner for your business. In our comprehensive guide to comparing software consulting firms, we'll explore six key factors to consider when selecting the perfect team for your project.
- Experience and Wisdom
- Subject-Matter Expertise
- Business Processes
- Size of the software firm
- Price to build the software
Armed with this knowledge, you can significantly increase the odds of success for your projects and confidently make informed decisions when partnering with a software consulting firm. From aligning teams and objectives to understanding industry-specific challenges and prioritizing user experience, we'll help you navigate the complexities of the software consulting landscape and find the perfect fit for your business.
The Importance of Experience and Wisdom in Consulting
Experience and wisdom are essential factors to consider when choosing a software consultancy, and we at Anthroware believe this can be as important as creating customer intimacy post-development and after product launch. Take Mark, for example, a business owner who sought a consultancy for a complex software integration project. He chose a consultancy with decades of experience in software integrations, that could help him with his business strategy.
The consultancy spent the first weeks of the engagement on setting goals, aligning teams and objectives, and then used their experience to provide invaluable insights and guidance. They leveraged their vast knowledge to navigate challenges and deliver a successful outcome. Mark realized that the consultancy's experience and wisdom were crucial in ensuring effective team communication and project success.
The consultancy has been there, done that
Put another way: The consultancy had been there and done that. They know that the most important factors to success are clear objectives and team alignment. They don’t wring their hands wondering where to go and what to do. They know and they do. And they don’t waste time on things that aren’t differentiators.
Just a day before this writing, I spoke with someone who’d hired not one, but three dev shops to create an app, with a promised two-month delivery. It is now 6 months later, and they still have only completed about half the project. Much of that time has been spent creating a tool that there are no fewer than 50 SaaS offerings already in existence. Experience and wisdom would have said, “We don’t need to spend a hundred thousand dollars to create that part – it already exists, and here’s a tool we should use.”
Experience also keeps a consultancy from overpromising and underdelivering (also usually clearly outlined in a software consulting agreement). They know what they can do within the boundaries of the project’s timeline and budget. They set expectations clearly and honestly, and then they deliver on the expectations.
How Subject-Matter Expertise Affects Project Outcomes
Subject-matter expertise is another important factor to consider. Anthroware had a client who needed load and quality testing on the new version of their Internet-of-Things offering. They chose us because we have specific experience with automated testing, RESTful APIs, and IoT; We specialized in the technology stack they required. Our focused expertise allowed us to provide tailored solutions and deliver the project efficiently.
Industry experience also matters
Anthroware has worked in Healthcare, Staffing, Education, Finance, CX, Entrepreneurship, Agritech, IoT, and AI. Our experience and understanding in these areas allow us to understand problem statements well, and to provide and present innovative solutions efficiently and with an impact that increases the odds of success. But we’re not experts at everything. Sometimes, a prospective client’s industry is not a fit. If the software consultant you choose, claims to be an expert at everything, be wary, they’re likely not experts at anything.
De-risking Projects Through Business Process Mastery
Understanding business processes is super important. Every business has its own processes and procedures. Every single one. There is no one-size-fits-all set of processes. Businesses establish processes that are perceived as most efficient for their business. However, even the most efficient processes age out. As a business gets more successful, its processes need to change to address its new success.
Failure to address these processes leads to a certain amount of what we at Anthroware call Complexity Debt. A deep understanding of your business processes is vital for a software consultancy to effectively meet a client's needs. If your company wants to be one of the businesses that thrive in a recession, it's critical you have a partner that fosters this type of mindset.
SME + Understanding Business Process
Subject-Matter Expertise helps here. If a software consultancy has worked in your industry before, then they are already familiar with processes similar to yours. However, it’s important that you, as the buyer, understand what your consultant’s process is for finding out what they don’t know. We don’t always know what we’re supposed to build. But we do know how to find out, every time.
One of Anthroware’s favorite clients is a nationwide staffing firm. They have the most complex business processes we have ever seen, by far. They’re addressing compliance and legal requirements in 50 states, banking regulations, and labor law, in addition to their own complex franchising, financial, and data-flow processes. We put our processes to work to understand their processes. This makes decision-making easy. Understanding their processes allows us to establish project boundaries, and allows the team to be aligned on goals, outcomes, and schedules.
If your software consultancy isn’t focused on your business processes, then they’re likely to miss important things, which leads to expensive decisions down the road.
Human-Centered Design: Prioritizing User Experience
Human-centeredness is extremely important. Especially when it comes to the platform and architecture human-centered design examples. At the end of the day, unless we’re building an autonomous robot, we’re building software for humans to use. Even the much-buzzed ChatGPT is for human use. It’s a complex platform that enables people to do the things they want to do. Human-centeredness is critical for software consultancies. Too many teams lose focus on the fact that people are the ones impacted. Quality of life is paramount. Good software products should delight their users by delivering exactly the right experience at exactly the right time.
Digital transformation consulting firms are all about moving processes from difficult to simple. It takes all kinds of different forms; automation, streamlined workflows, software tools, etc.
Choosing the Right Size: Boutique vs. Large Consultancies
What size software consulting firm is right for your business? Do you need the Big 3? The size of a software consultancy can influence the dynamics of the partnership. I used to work for a vast consultancy that frequently secured vast software contracts with vast budgets. The first thing that would happen on new contracts was that a huge team would be assigned. I recall being on a team with about 40 other developers, only about 5 of which had any work to do, and there were 40 different understandings of what we were supposed to be doing. With that company, I worked on a project for a school district that had a $2M budget, and the client was almost not even worth their time – they got no love.
Small teams win big
Boutique teams do things differently. The “small” projects at big firms are “big” projects for small firms. Boutique teams treat their clients like royalty and can make changes quickly when they’re needed. Large firms have complex decision-making processes and bureaucratic procedures that can delay progress. Projects become cumbersome, with many layers of communication and a lack of direct access to the core team.
Smaller, more nimble firms with streamlined processes are often a better fit and have a much better time handling changes to requirements and communicating the impact of those changes.
Balancing Price and Value in Software Consulting Firms
Price is a tough nut to crack. If I told you that by spending $100k, you would unlock $1M in profit to your bottom line in a year, what would you say? Price should definitely be a consideration when determining whether software consulting is worth it, but it is a huge error in judgment to make price a primary driver. The price must be viewed relative to value and to the cost of doing nothing about the problem you want to solve.
A short story of price vs value...
A few years ago, Anthroware was engaged by a hospital system to work with them on employee engagement – to find ways for employees to have more positive experiences at work and to more cooperatively participate with other employees. We held a few workshops aimed at understanding (using a similar approach that we use with our B2B competitive intel projects), “Why aren’t you engaged?” and a few things shook out of the process. Among them was a business process that impacted nearly all employees. It had two major impacts: 1) People started their shifts in a terrible mood that took a long time to correct, and 2) It was costing the hospital system several million dollars per year. The proposed innovative solution was estimated at around $75k. That should be a no-brainer, but someone looked at our hourly rate, decided it was too high, and passed on that project. That’s several million dollars to the bottom line that they lost because “If we want to make that, we can do it for a fraction of the price”.
Politely: No, you can’t.
Quality costs money. Speed costs money. Nailing product-market fit costs money. It goes back to point 1 of Wisdom and Experience. Are you hiring a team that knows how to architect a house that will withstand an earthquake? Or are you hiring a team that will simply pour the concrete where you tell them to? Are you looking for a partner? Or a lackey?
Price is important, but price and value are not the same thing. Instead of price, look at value. A good software consultancy brings your needed value into its price, connects that to the schedule, and gives you massive value in the timeframe that it’s needed. Even when it comes to more simple things like navigating custom website spending for your digital storefront, these things should still be considered.
The Winning Formula for Choosing Your Consulting Firm
In summary: Too many projects fail. Hire the right team who:
- Has experience – they set realistic schedules and expectations, can understand objectives, and prioritize well.
- Knows the subject matter – Helps set realistic schedules, refine and clarify objectives
- Understands the business – Sets requirements correctly upfront. Less shifting, more doing.
- Understands what software is for: Humans – Aligns teams, addresses product-market fit (unexplained causes)
- Will treat you like royalty – Aligns teams, maintains objective clarity
- Delivers on time, on budget, and with great value for money – Gets it done on time, on budget, and keeps everyone aligned.
That’s the key. By following this winning formula, you'll significantly increase the likelihood of a successful partnership with the right firm. Remember that investing in the right team can save you time, money, and frustration in the long run. Make an informed decision when you are comparing software consulting firms, and your project will be well-positioned for triumph in today's competitive software landscape.