Once upon a time I showed this Dilbert pic to two people. One of them (Alex) said: “Those developers are sooo slow!” The other one (Max) complained: “Yesterday I asked to hire extra people, there are only ten of us and we are swamped with work. And you know what?! They turned me down!”
Both Alex and Max were working for the same company. And, as you might have already guessed, Max is an IT guy, and Alex is a lawyer. Max’s department was developing a contract management system for the legal department Alex worked for.
Who is right and who is wrong in this case, what do you think? I believe, that both Max and Alex are right, as they are both facing problems and are trying to solve them.
Let’s look at Dilbert’s example then. So, he goes to his business customer and says that his team is dealing with too much work and they simply must to hire three more people to get job done faster. “We need three more programmers”, he says.
What has the business customer heard? “To do the same work in the same conditions we will have to increase our costs, and the budget overrun for 36 months will be $1,080,000, if we presume that each new developer costs us no more than $10000 per month (including salaries, taxes, insurance, utility bills, etc.)”. And so Dilbert is turned down.
Obviously, Dilbert made several mistakes when approaching his client. Firstly, he offered no arguments to support his request. Secondly, he didn’t discuss any alternative options. Finally, there was no business plan and no calculations.
The perfect Dilbert, on the other hand, would say the following:
“Our users give us 50 tasks per month, yet we manage to fulfill only 40 tasks. Which means that every month our plan grows additional 20%, as we are unable to complete 10 tasks out of 50. At the moment there are 180 tasks on our plate, i.e. we have fallen behind by 260% in more than a year. Next month there will be 190 tasks, then 200, and it never ends.
We need to hire several extra developers to reduce this lag. Each developer will cost around $10,000 per month. If we take three new people, we will be able to catch up with the plan in 8 months. If we take two new people, we’ll do that in 12 months.
We could also purchase several system components which will help us increase our development speed and allow our users customize the system themselves. The components we need most will cost $200,000” .
Here’s our business proposal:
Option 1. Hiring 2 extra people:
· Labor costs increase: $20,000 per month
· Annual costs: $240,000
· 36 months’ costs: $720,000
· Catching up with the plan in 12 months
Option 2. System modernization:
· Purchasing necessary components: $200,000
· Vendor support and updates: $70,000 per year
· System modernization (2 person-months): $20,000
· Annual costs: $290,000
· 36 months’ costs: $450,000
· Catching up with the plan in 8 months
If we take annual costs into account, option 1 is cheaper, but development speed will be lower. Option 2 seems to be more expensive in the beginning, but actually it’s much better than option 1 in a 3-year perspective”.
My point is that you always should discuss all available options with your client, explain them comprehensively and in detail. Customers must be aware that they have a choice. Hiring extra people implies labor costs raise, whilst purchasing several components is a one-time investment. And it is up to the client to decide which option suits his needs best.
We have embedded a TCO calculator into our website which helps you calculate how much money you could save for your company if you purchase Workflow Engine. However we decided not to include a 3 year plan in the calculations, as the total amount might scare potential buyers off. 😇
And how do you ask your clients for budget increase?
