Small Projects Place Greater Demands on Outsource Suppliers
This week we heard the death rattle of a dying breed. Vodafone, the world’s largest cell phone company, signed a seven-year application development outsourcing deal with services giants IBM Global Services and EDS estimated to be worth more than $2bn. The companies will also provide application maintenance in eleven countries.
Five years back, mega deals were all the rage. According to separate reports from IDC and Technology Partners International (TPI) last month customers are now signing up to shorter contracts. Five to seven years, instead of seven to 10. TPI thinks we could even see sub-five-year deals. TPI said $1bn plus deals are at their lowest point in four years. IDC said such deals fell 3.1% in 2005. Mini deals are up: contracts worth less than $250m were up to 23% in 2005 from eight percent the previous year.
Smaller deals and more of them - a blessing and a curse.
Small deals mean suppliers must prove value and return on investment sooner than ever before. That accentuates the issue of how to measure and demonstrate value. Traditionally, project reporting software is used with other techniques. This can take time to bed down and fine tune… time service providers no longer have. Such tools are also notoriously bad at providing an accurate picture of events, which becomes a critical liability in short projects.
This trend is creating a growing demand to measure projects using real-life metrics gathered from the developers’ desktop and viewed in real-time. Such an approach provides the immediacy and clarity needed to measure and manage short-term engagements, which are the equivalent of a hurdle race versus the marathon run of mega projects. One minute mis-calculation or oversight in a hurdle race, and down you go - you’ve lost. In the marathon even if you go down, you stand a chance of getting back up, re-adjusting and coming from behind.
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