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Today Talk - Tomorrow No to accountability..
T&M model, encourages talk.. talk for ever.. with least concern on business value.. We do see few customers, inspite of many failures they continue to embrace, T&M, as hourly rates perceived to be looking cheaper.. however total solution either does not come at all or it would prove to be too costly..
T&M - Is actually Talk and continue to enjoy Monthly returns.. (Through Relationship rather than results)
Where is the accountability? in T&M..
I do understand Fixed Bid too make things too complex.. as each customer change becomes wastage of Management time...
Where do u think we need to draw boundaries, specially when business is moving towards Products and being innovative..
Do we see the need for a better IT business model, where it makes either sides accountable and pay for the losses if things don't shape up at the last mile...if things work, then Product is the high value business for both..
Raja Nagendra Kumar,
-Inventors of FixedT&M model
Edited Sat, Jan 21, 2012 3:06 PM
Replies to this Topic
I think both models will exist. Client and service provider need to collectively decide based on the clarify of the scope of work and the ability to estimate.
When comes to maintenance or technology management kind of work, the model is going to be T&M always.
In both cases, the project management is vital and the client need to monitor the work and measure the outcome.
If the client do not monitor regularly, then they deserve to loose that money and the service provider deserve to enjoy THAT CLIENT relationship!
in my view is good for
- Customer Flexibility to change without big PM efforts
- Provider to expect constant revenues
- Allows Provider to some how sell bad and cheap and taking bodies or can make sure good bodies fail to deliver bad results
- Delays and risks to client, if team attrition is too much
- Provider is responsible for Supply of bodies, Customer is responsible for delivaries
- Fun as most of the Customer will have no time or the level of technical competence as the professional team
Fixed Bid is
1. Customer to have fixed solution cost
2. Provider has a way to innovate and deliver cost effective solution, which does not talk about resources & their time lines
- Provider responsible for resources and also delivery value
1. Customer and Provider can only accept changes with huge PM efforts
2. If the quote is not proper or requirements are not well controlled provider will have to spend too much
3. Client can exploit provider on the name of things not done
4. End product is likely to become obsolete due to technlogies can't be changed as the new one comes in.
We think as the new models of offshoring and monitoring are emerging, specially with Agile and iteration approach in place, we see both these models can be merged and called as FixedT&M model where in
1. Client and Provider agree for Fixed Number of resources and for Fixed Tenure
2. Provider can provide his best delivery plan for each two weeks for Client to evaluate best value which provider can bring in rather than trying to monitor him self and loos the Questioning power at the end
3. Provider can innovate and bring in best possible results through internal checks and solid technical reuse and with solid product engineering accountability on provider end.
4. As it is provider who puts forward his best plan and for every two weeks, he needs to make things happen at no extra cost to customers even if things go wrong, than what was committed in plan
5. As the commitments of the provider is for each two week plan, customer can learn from these releases and suggest next iteration with changes to requirements without great PM efforts
6. Client is at less risk for Team Attrition which exists in T&M bodies approach, as Provider is the one who is accountable to deliver for each two weeks. Provider has to meet the planned results irrespective all the internal issues including attrition.
We think FixedT&M can bring in desired fair business and Innovation needed in engineering as most of Services 1.0 is about counting bugs, regressions, code complexity, pleasing customers on reports, while FixedT&M is Services 2.0 Model, where in Accountability is mutual and it is about Work and Results with least bugs, zero regressions, simpler code etc..
If Product companies which are fed up on end less list of bugs, end less list of team and people issues, think on FixedT&M model as the way safeguard the product..and their off-shore investment
Yes, if people still want to fit value in T&M or FixedBid, they can do.. but pl. don't expect results as the contract is weaker on one of the side..
>If the client do not monitor regularly, then they deserve to loose that money and the service provider deserve to enjoy THAT CLIENT relationship!
Yes Lakshman, true, clients are made to sleep after selling T&M by our expert BD's or Relationship Manager.. and hence they sell bugs and regressions and ever increasing bodies count as features....
Why fit in T&M and FixedBid when some invention can be done in contractual time it self..
Happy, if any could comment on our FixedT&M model.. where else it can result in failure to any..or would allow either side innovate and feel safer and value for money at last mile to both.. All the inputs from the forum shall be compiled and circulated once we see sufficient views.
Raja Nagendra Kumar,
Edited Sat, Feb 4, 2012 1:27 PM
Instead of looking as T&M or Fixed, let us look at What causes success and failure in service projects
Following process does not make parties to work and succeed together. To succeed, it needs trust and to build trust it takes time. One can start to think why some one responsible to build trust does not create mechanism to create trust.
Action and delivery with being flexible ans spending time to build relationship in earlier days brings trust. if trust is not earned in first 3 months, it is tricky to earn later in relationship.
Dear Srinivas, Nice to see your inputs.. pl. find my further thoughts below
>Instead of looking as T&M or Fixed
How one starts is how one would end.. So, the way business contract is.. the way results are..
T&M only talks about people and time.. and not about what people could really stand for clients business last mile..
Provider says I have given you best and verified CV's every thing is transparent to client.. so pl. don't account me for what ever happens at later stages..
Yes, in case people leave in between, provider has a work, to supply another body which client can again interview and choose..one among many CV's which are any way floating around (internal bench or from sourcing companies)..
Frankly speaking, provider can't do better even if he wants to as he is worried about infrastructure cost, resource costs and being 100% Transparent enough and his margins after all these pains, to let client drive his team.. He also need to take care of clients hourly rate expectations and time lines to deliver.. (exponential stupidity guaranteed..)
However our observation is 95% of the clients them self are not experts in adopting technology (converted to true products) for his business advantage.. so the fate is written..as the time passes by..
Assuming :) provider being expert in technology, they can optimise many things.. however he can't be transparent and be open to more changes as they come up.. as every change can lead to messy change request debates (specially if the provider is small).. as the last mile evolves, needs would have evolved to many levels higher than initial needs and can makes fixedbid deliveries of less business value to clients..unless he invests more on correcting them to new level of Requirements..( The way people write code, corrections can take more time than the initial fixed bid)
I strongly think both the models are evolved for mutual greed on one of the side.. none of them can help in getting the best product out.. as Business is of prime importance in each.. not the product.. Foundation it self so very week contractually..
>if trust is not earned in first 3 months, it is tricky to earn later in relationship.
Most of the off-shoring projects start with estimates to deliver in less than 3 months and go to years... So I see the relationship is made to work not because of deliveries.. it because of PM, BD's and Top Level Connects and the proof of created complexity in the first 3 months (in the form of bugs, people working hard and till results can't come) ..hence most of them say relationship is people, process and brand comfort rather than value delivered..
I clearly see the need re-thinking globally on..
1. Either side Business align to Last Mile Deliveries
2. A need for new model which is mix of both T&M and Fixed as applied to Agile Iterations, so that provider can take the accountability for results produced, however provider is given guarantees on team and length of engagement to put some best Optimizations
I do understand world around me still think every thing is fine in T&M or Fixed..
I only apply their meaning of 'fine as the Business advantage' to the guy who is saying this.. definitely other side must be suffering..Innovation is any way given the least priority...(practically)
Most of the time, we do give the solutions :) much before when other side can't even acknowledge problems right.. So, we look forward to coming 5 years or so.. people talking some thing on these lines..(Time lines for Society Lag : Society learns from misery and failures.. No leadership can teach society through preventing failures)
Other approach is all of us need to look at why many IT projects are failing to deliver last mile business value, keeping aside business, employment fears, thinking within the box of process and within the known cultures..(break all these boundaries..)
Again.. I see the problem is in roots.. of the contract approach.. not in the people or process.. I would blame Provider Systems..who have managing to show wrong things as value...Clients buy-in for cheap hourly rate as the way to cut costs..They so ignorant of Total Cost..
Edited Wed, Feb 29, 2012 8:09 AM
I do not like blame game.
Systems are build by people. Provider Systems are made of people. Clients are people. Contracts are written by people.
Questioning Systems, Clients and Contracts and making them listen and putting right question is challenge.
> Systems are build by people
True Srini, I shall put this in slightly different way.. it is peoples actions which build the system, actions are result of many constraints.. which can be due to self goals and top guys directions which others had to follow..
over a period of time people in the system co-work, co-argue and arrive at some kind process, culture, people level comfort zones.. which decides the fate of the organization..
However, as we are in era, where many things are quite known, top leaders also follow Conventions / copy other similar business in the Industry. They can't be innovative on actions as top leaders are constrained by many social, traditional factors.. such as stock market, attitude of VC's etc.. That is why I have brought in the point of need for change at Contractual level... Once clients start demanding accountability differently.. I think every one will have to change their process and culture..and show results as per the sales talk..
> Questioning Systems, Clients and Contracts and making them listen and putting right question is challenge
True also, even the best questions will not fly and we can't expect them to listen.. as currently people are in honeymoon period, to say that they have followed the conventional process.. so don't account them if the results are not positive..also conventional contracts give no scope of last mile accountability, so providers are any way safe guarded..
We neither needs to question or expect them to listen.. however better way to see them seeing on next side is through few success (in revenues) by others, i.e some of the startups which follow different services model succeed, rest would follow.. However, it still needs support from right clients, who are looking to scale technology to scale business.
My thoughts in sharing the contractual approach to last mile accountability, which is beyond bodies was meant to alert Small startups, who are serious about their product engineering excellence. They can realize the need for accountability by its vendors, early and explore non-traditional more cost optimised models, of getting the best, at least total cost and time frames.
I only hope our experience to seed in - next better way to do IT Business. This is for Organisation owners, who are suffering from messy engineering last mile results..or they see the need for scaling the technology.. without linear growth of people
I clearly see the need for contractual level re-thinking.. as start point for great products emerge or service companies to start playing a vital role for product focused organisations.
Edited Fri, Sep 21, 2012 4:14 PM
Raja, Srinivas and Laxman
To address all of your concerns on accountability, we have come up with a tool called as Sapience - www.SapienceAtWork.com which provides automated facts about work, brings transparency and accountability to time spent at work (and not spent at work).
Outsourcing companies can tie their outgo to a minimum of x amount of work hours as shown by Sapience.
Companies like Zensar, KPIT Cummins, BMC Software as using this product. Zensar is in fact taking a step further and promoting Work From Home model which will reduce their costs drastically and since the payments are tied to output (with data coming from Sapience), they expect overall output to increase. I wrote a blog - based on the interview by Dr Ganesh Natarajan - highlighting the benefits.
Obviously Work From Home is not possible unless there is a system that measures productivity and makes the individual accountable for the same.
Sapience is that critical cog in this wheel!
Nice to note about your product Avinash.
Where can I get more info on
1. How does one break the work into accountable tasks
2. How does one takes accountability independently without saying I am too dependent on others
3. How does this tool able to over come talking smartness of people (such as showing bugs as features)
If you could connect me to Zensar or any of your clients who are using this product, it would help me know of your unique offer related to 'automated facts'
'Missing Professionalism in Software Development'.. Do we agree... See what Robert Martin with his 40+ years of Software Code Writing experience says..
How much we can agree even before we think that we need to be part of early changers..
Trust me every project had to fail.. when the following constraints are well defined and client systems knows how to measure them on time..
Total Cost of Solution to be Least i.e
- Total Money needed should be least (forget about 1 US resource to 2 or 3 Indian resources.. maths.. Quality would suffer more as we keep adding more resources)
- Maintenance cost should be born by Providers
- Pains to Management and developers should be least
- Post Production bugs to be least
Edited Fri, Sep 21, 2012 4:16 PM
Dear Raja Nagendra
This is one more provoking theme you have taken up. To make it short I am not going thru all comments in serial but straight coming to your opening post.
- T&M has relevance and is quite popular. That is how big part of the IT services Industry is working - both as a suppllier and also as a buyer of services.
- It can not be confused. Please do not do that on the fly. Qualify by context and issues.
- It is understood as a matter of business maturity - seasoning - that buyer knows what he wants out of that hourly resources. Limitations or strength or weakness of such resource is understood and acceptable.
T&M means billable resource to be used and paid for quantum of work time spent. Deliverables can not be creative or architectural or insight driven or expertise or subject ideation driven.
It is exactly like daily wages. So what accountability are you posing and confusing the topic. For a hourly or daily billable resource - like a daily stock market trader- you get what you are treating him for.
That is all. Confusion arises in the mind of the buyer who wants a solution to be designed and developed or product developed but treats it as SDLC sw development project. That confusion is on the part of the buyers.
Each buyer is accountable for what he orders and spends. Why blame the T&M resource or supplier. So let us not create panic without solid reason of purpose and business context.
Edited Fri, Sep 21, 2012 1:51 PM
I agree with Lakshman "If the client do not monitor regularly, then they deserve to loose that money and the service provider deserve to enjoy THAT CLIENT relationship" .
Nagendra, Why should provider pay money when the client sleeps?
I am with Rajendra "it is exactly like daily wages" and " you get what you are treating him for".
I have seen clients who want to pay less money per hour and needs highest quality of development and my answer has been " if you pay peanuts, you get poor quality developers and even if we get good ones, they will move"
Missing professionalism in software development.
Certainly no please. Professionals are professionals. Such misgivings arise due to lack of inputs and clarity and maturity.
>it is exactly like daily wages
If we agree T&M should be seen as above.
professionalism and daily wages would they go together!!
To me Business can be done with or without professionalism..
'Why should provider pay money when the client sleeps?'
If provider systems thinks that, they have professionals, they should stand for what they produce.. yes, if provider systems think they are daily wage labors.. they don't have to..
At least, I don't think any of the services company would like to establish themselves as 2nd kind of system.. :)
In this context, what if Doctors say We are paid for following process at hospital and not for results :).. Do you go to such Doctors and get heart surgery done..
If we think we should still go to such doctors.. then I can only see Capitalism wins over people.
Edited Fri, Sep 21, 2012 4:58 PM
>Missing professionalism in software development
Rajendra V B Raja, This statement is from the Video link
I completely agree to this statement as it is told by Robert Martin and I see it clearly each day :). We are into rate race to spend time or add more resources (as money is flowing for spending time and not for cutting down time with innovation or for being professional) with least end value to clients
Rajendra, if you say T&M is about time and bodies.. can we coin a different name for Last Mile Results Accountability and to Insure Clients Interest (I am assuming here that, clients wants to have product, which he can sell to masses and he has too less IT Knowledge)..
If some of us can see, this is as another avenue of IT business, such provider systems can challenge and push for high value deliveries and can encourage Internal Innovation. Hope such culture too can be good for Indian economy. However we need to see how money can flow for such accountability as there are no established business models currently.
I wish all of us, think beyond 'daily wage guys/business'.
>misgivings arise due to lack of inputs and clarity and maturity.
As a professional I feel guilty of charging for bugs..like the way we don't expect doctors to feel ok to kill people due to their learning curve.
I begin to understand in IT it is ok.
Edited Fri, Sep 21, 2012 4:59 PM
Raja Nagendra, Can you tell me what do you mean by "missing professionalism in Software Development?
Are you saying the doctors, lawyers, consultants and tuition master who charge based on hourly or daily basis are not professionals?
The gap is Professional vs Professionalism
Something is already discussed here by someone else..
Professional Driver.. Cannot be called as Professional.. if he expects owner to monitor him to make sure he should not make any accidents. In case accident happen, he must own the responsibility and accountability, then only best outcome can come or gives space of innovation.
I am questioning how in IT.. especially when many accidents happen in the form of endless list of bugs or last mile fails miserably... in T&M model how do we justify and correct our self (provide we are ok to take the accountability) to be better and better...