What You Are Buying with Custom Application Development

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What You Are Buying with Custom Application Development

There are several ways to purchase Custom Application Development. It is imperative (for many reasons) that you understand how your provider thinks of the contract and what you are buying. There are many variations, but they can be categorized by three themes:

1. Staffing
In the staffing model you hire a programmer who has a resume indicating the skill you think you need to perform the programming. You may try to find the person yourself or hire a staffing company to do that for you. Either way, you are hiring someone whose resume indicates they have the skills to perform custom application development. The typical staffing firm is not capable of truly vetting the candidate other than checking the resume, checking references and past employers, and validating degrees and certifications. After that, though, you are on your own to evaluate, manage, measure, and get value from the person. You are buying hours for dollars period; it is up to you and you alone to get the value from the person for those hours. If you are not an application development person yourself, this is the most dangerous method.

2. Application Developers Who Develop a Product and Hand it Over
In this model, you pay a company or person to create a computer application for your business; you typically pay a flat fee but it could be based on a time and material contract. The end product is the program you use and you will have certain rights to use the product. The copyright and ownership of the product and most importantly the rights to the source code, though, remains with the code writing company and not with you, unless you specifically get those rights as part of the contract. This form of application development has advantages because you can hold the company responsible for fixing bugs and for keeping multiple people trained on the product, etc. because it is their product. They can also, though, sell that same product to other companies including your competitors.

3. Application Development as a Service
This is the type of Application Development that Squaretree provides. In this case, you are outsourcing the task of Application Development as a service to our company who provides this as a service to many companies. It is our core competency and therefore, your expectation is that we are very good at it and very efficient with resources. We do not develop product; we develop applications just like you would create for yourself if you had the expertise to manage programmers and analysts in-house. The added benefit, over the fact that it is our core competence, is that when you don’t have a specific need, you don’t need to pay for the expertise. The potential downside is that we cannot hold people to a job if they decide to leave or get hurt, any more than you can. Because this is a service, when someone needs to be brought up to speed on your project, that becomes your financial responsibility, same as it would be if you were hiring. The good news is that we know how to do that very efficiently and we know how to manage, evaluate, test, and produce in our core competency in a timely manner. As in the case where you were trying to manage Application Programmers inside your organization, you would have to pay for this effort, but in our case, it’s guaranteed; you would be charged for the successes we had at performing this task, not the failures.

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Comments
  • Rene Zamora
    Reply

    Interesting. I have been providing outsourced sales management for four years but now by Bills terms realize I might have been providing a service. As stated in the opening paragraph, “it is important to understand how your provider thinks of the contract”, because terms can be viewed in many different ways. From a sales perspective I encourage my clients to manage expectations. Your product or service definition would be one HUGE area to make sure your client or customer is crystal clear on. The sad part is many sales people assume clients already get it.

    I like the description of differences. Thanks for sharing Bill. Rene

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