How do I plan my software development project to have the quickest ROI?

A quick return on investment (ROI) is always the main concern of any prospective client. Sometimes the issue is addressed directly, or it is implied in the conversation, or it is raised by the person tasked with shopping for a development firm, or it is raised by that person’s boss.

One important thing to consider before we dive in is “what are you really trying to find out”? There is a difference between a request for a plan, and a need for reassurance – both valid concerns.

Let’s take a closer look at planning for the quickest ROI.

Hold On, Cowboy

People love having their questions answered by another question (NOT!). Thus, the first step is to understand: why quickest?

The following follow-up questions are essential in understanding a prospective client’s objectives and concerns, above and beyond the immediate concerns shared and the three magic letters, ROI:

  • What is an acceptable timeframe for “quickest”?
  • What are you sacrificing by getting quick ROI instead of planning for the medium or longer term?
  • Who are the decision-makers behind the specification for quick ROI, and do you have the buy-in of the people at your company?

This last question serves to understand whether this objective is something that will help your client company, or the individual representing your client company. Of course, we would prefer the former, but sometimes the latter is necessary in terms of getting the project approved.

The Only Constant Is Change

While planning for the quickest ROI at the beginning of a project is laudable, you need to determine what factors of change might affect the definition of both “quickest” and “ROI”. It is truly worthwhile to run these factors by your prospective client and see whether the definitions hold or shift. These factors may include:

  • Market
  • Competition
  • Corporate vision
  • Internal pressure/project sponsors

Qualify and Quantify

When it comes to ROI, you must move away from the term and its implications and challenge your prospective client to define what it truly means. How do you measure “quickest ROI”, and how do you determine whether the goal was achieved?

First, have your client project the cost of doing nothing over the stated timeframe. In other words, if the prospective client did not go ahead with the software development project, what would it cost them?  This can be a direct cost, such as loss of revenue, or an indirect cost, such as loss of employee motivation and performance. For example, employees might be spending a significant part of their day doing tasks that do not leverage the skillset for which they were hired. This would include any time-consuming, manual data entry necessary for doing the data analysis they were hired to do. This can lead to frustration, lower performance and motivation, and lower employee retention.

Second, concentrate on the last letter of “ROI”: investment. Investment can be high upfront, lowering gradually over time, or it can be somewhat constant. Is the client looking to recoup their investment very quickly after go-live, or are they looking at a gradual return by phase or milestone?  This information will help set milestones to measure this metric.

Finally, we often speak of value in software development. This term gets bandied about, but it may mean different things to different roles. A software developer’s idea of value in a given functionality may differ from the client’s main stakeholders’ idea of it, especially if they don’t share the same criteria. A common scale to determine value will go a long way to empowering each member of the team to provide the value needed to reach a good ROI.

Let the Experts Be Experts

Often, clients describe the solution that they think will solve the problem, instead of describing the problem itself. This can have the perverse effect of channeling your expert onto a given track and validating biases. By describing their problem simply and succinctly, clients gain the advantage of letting the expert visualize a solution from their perspective.

The same applies to the “quickest ROI” issue. Earlier, we talked about defining and quantifying ROI – these are the guidelines that frame the objective on a macro level. If the objective is properly understood and communicated, and if buy-in is there, the experts can translate the macro objective on a micro level.

How to Plan

Putting it simply, here are some high-level points to consider when putting together a plan for quickest ROI:

  1. Agree on definition of “quickest ROI”
  2. Understand reasons behind it
  3. Set quantifiable objectives
  4. Track and measure
  5. Adjust in light of changing factors
  6. Communicate

To put it bluntly: “be on the same page, everyone”. Easier said than done, as business and technology do not always make good bedfellows. A good team – i.e. client and expert firm – shares expertise, maximizes the other partner’s strengths and minimizes their weaknesses. “ROI” may mean little to a software developer who, on the other hand, does care about value; does their definition of value translate to “ROI”, and vice-versa?  Perhaps it does, or perhaps you’ll need to do some work to reconcile and map the different perspectives to achieve your common goal.

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This entry was posted in Strategy
by Alexandre Huynh.
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