Why business analysts are so important for successful software product launch?
Sergey Atanasov, the CEO of LOVATA company, talks with Rating the ByNet about:
- Why it is unnecessary to educate clients;
- Who is a perfect client for a web development studio;
- Are clients willing to pay an hourly rate for company’s web development services;
- How has an average check for a standard project changed;
- Which innovative solutions have become more in-demand among Belarusian clients;
- And much more..
Is it possible to evaluate the web development market in monetary terms? How can you estimate the market volume for the past year?
It’s too broad of a question to be accurately evaluated. I personally can’t estimate the web development market and don’t think that anybody can do so just because people can’t identify the market borders. I would have to work solely on the Belarusian market in order to answer your question. However, thanks to our technology stack, we create products for companies from all over the world: the United States, Canada, the UK, Israel, Russia, Kazakhstan, Belarus, etc.
Have the prices decreased for standard projects during the last year or year and a half?
No, they didn't. LOVATA has changed a lot during this period of time. We’ve bet on large and complex projects. The average size of a project has grown five-sixfold. Therefore, the average check has increased accordingly, but the hourly rate increased insignificantly. At the same time we now deliver projects faster than we did two years ago, while the reliability has increased.
Do you work by the hour? Are your clients ready to work in such way?
Any incoming request is seriously evaluated based on required labor amount in hours. At the same time it’s always possible to choose a suitable scenario according to Time and Material, Fixed Price or a mixed model of cooperation.
If time to market does mean something to a client and deadlines are really tough, then the Time and Material model helps to quickly start the work. If we talk about Fixed Price, then we have to evaluate the project thoroughly, otherwise we might put in excessive risks and come up with an off-market evaluation. Such event is quite common for our market. All clients prefer to negotiate a fixed price, but often forget that we also fix the scope of work. However, we are ready for Fixed Price if the client goes through our business analysis phase.
If neither TM nor FP models are appropriate for a client, it’s possible to work according to a mixed model of cooperation. The system’s design and prototyping can be billed by the hour. Then, when it becomes clear what kind of functionality needs to be developed, it’s possible to estimate the rest of the project’s phases according to the Fixed Price model.
We are probably not the most flexible company in terms of negotiations, but we are being honest and straightforward with our clients by informing them about all costs and pitfalls beforehand.
Please name five most common client-contractor relationship issues that exist on the web development market.
Issues with clients always arise for a reason. I am confident that most issues are predictable in advance. However, oftentimes companies deliberately ignore the triggers and smooth out the corners, keeping in mind that the risks are present and can be worked out. But when the risks go off, they are the ones to blame.
In all seriousness, it’s important to understand who you are and who your client is. We have realized that it’s quite difficult for us to work with a client who follows another strategy of competitive advantage (Porter’s five forces analysis). For example, LOVATA is aiming at the leadership in the sphere of custom developments on the open-source platforms for major clients. We get a contract from one major company which in all respects seems like our perspective client. However it’s following the cost leadership strategy on the market. At this moment we know exactly how difficult it is to sell our philosophy and values to the company who is practically beating the hell out of its clients and providers. But because we call ourselves professionals, we don’t really care about things mentioned above, until the given company starts negotiating the way it is used to do. By the way, we had an interesting case when we spoke to the client in the same way he did to us, made our position clear and terminated the contract getting our money back. Now I pay attention to this – a client may be a great person, but his company is just following another values.
Which innovative solutions have become the most in-demand ones among Belarusian clients?
Lately website builders have been very active on the market. This trend has first started as a solution which don’t represent anything beneficial for business. However at that moment when they have just begun to appear, it was clear that it was just a classical model of the undermining the market. For market players it was a hint that the website builders have decided on their positioning and target market. No matter how cheap the production is, it’s not possible to compete with the $10/month subscription. Not everyone has understood the reason behind it, but they got the consequence. It’s seen on the Rating, that most of the players below 10th place have changed. Students’ $200/website were replaced by website builders’ $10/month. More than that – there are qualitative website builders for users who require basic features. I guess it’s obvious that they are only getting started.
On the other hand all market players acknowledge the multi platform solutions trend. It’s another side of the coin which includes complex solution on the business needs level. Here they play by the rules of different understanding of business, sectoral niche competence and technology stack. By the same rules LOVATA plays.
How much are clients ready to pay for the multiplatform?
There’s not much to choose from. A client comes to us with an idea or with an accurate vision of decision. All our projects begin by “sleeping their way” in the business analysis. Only after we’ve analysed every single detail and formed Vision&Scope, only then do we suggest the solution. There is no way we can ignore the audience in the modern world. Users have become more demanding and practically everyone requires the omni channel model. So the question is not whether clients are ready to pay for multi platform solutions. It’s what we should start working on first and when we should work with a whole solutions complex. It’s possible to start from one channel and move on to the second one only when the first reaches the operating recoupment. By the way, business analysis stage answers another question – how much is it all going to cost in the end? Before development process starts a client already knows what is waiting for him in the future and what risks he will have to face.
How should a client be raised and educated?
There’s no such way. The market itself will teach clients and an amateur web development company everything. Most people are only learn the lesson by stepping on the same rake twice. A couple of times they make mistakes, but then they start seeing the whole picture. Many organizations don’t order web development in the same company, but they choose another company instead. It speaks for itself – just wait and you’ll get your client. Our client is by priority more literate. If someone comes with imperative requirements saying he needs a all-wrapped-and-shiny Bitrix instead of a business objective, then he might need an integrator in the first place. If to draw an analogy – we don’t just make a suit sit nice, we custom tailor it. Our client does not have to be educated, he already knows what he wants. Things that matter are industry experience, business competence, reputation, reliability and development speed.
How does a typical Belarusian client look? And who is a perfect client for a web development studio?
It’s quite complicated to answer. He probably looks like this – blue eyes, well dressed, values his and our time, knows his business and knows how it works, he doesn’t tell us what to do but instead he takes part in the process, awaits a great result and takes responsibility for decisions made. He is happy when success comes and doesn’t hide us from the competitors under a big blanket, he respects our opinion and has the one of his own as well.
What products are mostly in-demand for clients?
A client rarely knows what he wants. He comes with an issue and goes away with a solution. We’re happy and so is he. Development of sharing economy platforms has been trending recently. We have quite an experience in this sphere. Sometimes a client comes with a request for a project with a classical business model and leaves with a product created on the sharing economy model. I’ll say it again – such projects are almost never developed on the same platform. Almost always it’s a complex of solutions from web to mobile ones. The question is in which iteration what part of development appears publicly.
Are there any personnel issues on the market? It’s not a secret that outsourcing companies attract the best workers?
There are always going to be big fishes in the market.
What products do you give preferences to – boxed or open solutions?
A box is too functional and enclosed, and one has to pay for it with production system and high level of individual reworks.
Our experience testifies that small open solutions are often win in the competitive fight with commercial products. Often the main factor of this success is the concentration on more specific tasks and the ability to solve them quickly achieving the best result.
Without any false modesty I want to say that in technological aspect we are always one step ahead on the Belarusian market. Once when everyone was obsessed with Bitrix, we made our decision in favor of MODX platform which was responding to all of our strict technological criteria. Unfortunately nowadays this amazing product technically and morally has outdated. Paradoxical, but now it’s quite popular among Belarusian web development studios. We can say we’ve been working with MODX when it wasn’t that trendy.
Historically we are predominantly working with solutions and open original code, which is becoming an important part of IT industry with every year. Today OpenSource is a powerful driving force in the technological sector which also includes giants of silicon valley that have lately been considered as an object of hate.
We don’t think one should come to a developer and say what programming language should the latter one use. I almost don’t believe that client is very qualified in this question, apart from those who have already created major services and need the development of his product. Client is usually not ready to offer a suitable technology stack and an optimal process. This is all our job and we know exactly how to do it.
Why do you take part in the ratings?
It’s fun, I love the competitive spirit.
It’s probably an attempt to make a company more public. We don’t really care about a place we hold but it means a lot for some of our clients. There are great companies which are not even in the rating. And it happens so that in order to get to the purchase procedure one should hold some place in some kind of rating just for the record.