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A software services company has 3 main moving parts: Delivery, Recruitment and Sales.
In 2001, the Agile Manifesto was born out of discussions and debates between practitioners in software development. Scrum and other methods have been used extensively by software services companies to organise and manage their delivery process and teams. One could argue that this has played a
fundamental role in the growth of Central and Eastern Europe software companies during the 2000s and 2010s.
On a global scale, everyone has access to best practices, methods and tools. Companies can choose between Agile (Scrum, XP, Lean/Kanban, Crystal Clear, DSDM, Feature-Driven-Development, RAD, UP), Scaled Agile (SAFe, SaS, SoS, LeSS, Nexus, Disciplined Agile), Waterfall, PRINCE2 or DevOps. We can safely assume that the Delivery part is “solved” for software services companies.
Some companies are better than others at the Recruitment part.
What about Sales?
For many years, a vast majority of outsourcing companies have used the “pick us, we have low rates” argument to convince customers and win projects.
As quality delivered increased, costs have also gone up and this pricing strategy is less and less feasible. In many cases, it even becomes an obstacle, as low rates mean that they cannot compete on salaries with other companies that are looking to hire software engineers (tech, financial institutions, media, automotive, etc.).
The consequence is that the Recruitment and Delivery models they have built, which have been working so well for many years, are now also disrupted. Success for software development companies doesn’t come only from mastering the delivery and technical aspects of the business. It also requires a structured and disciplined approach for their commercial side of the business.
Owners, managers, sales and delivery leaders of software services companies that want to create a more sustainable business model for their companies should look at value selling and value based pricing as guiding philosophies.
The JUST Value Framework® offers a clear, actionable, repeatable path forward for anyone looking to implement value selling and value based pricing in a software services context.
Soft Fight — Price management for peace of mind © 2023. All rights reserved.
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