Selling Software Projects by Demonstrating Value Early

In my role as an Agile Coach, the majority of the time I am on the delivery, not the customer side of a relationship. However, prior to getting so heavily involved in the world of Agile, I experienced the reverse where I was the customer and experienced what I believed to be a highly effective agile sales process.

As the customer in this situation, we had bought along to our first ‘sales’ meeting with one of our bidding vendors a basic prototype, a presentation of our outline product roadmap and vision, and a mind full of ideas as to what we wanted. What emerged from here was quite a surprise and a departure from what I had experienced in the past – a detailed discussion about the vendors capabilities, a brief analysis of the requirements, a discussion about the need to develop a detailed requirements specification, and an outline quote no strings attached ballpark with promise of a more formalized proposal.

During this session, we experienced quite the opposite. One of the vendor team was an experienced agile project manager with some obvious sales flare. Instead of the sales approach outlined above, this PM facilitated a brainstorm and planning session which outputted a first cut of a reasonably well defined product backlog that you would typically expect to see during the spin-up of a well executed agile project. Furthermore, this PM had bought along a couple of member of a development team who were working on a similar project. These people provided useful input during this session (appropriate domain knowledge) and provided high level estimates (in story points which were briefly explained to us) for completing the work based on a team similar to theirs. We then all collectively reprioritized the backlog based on these estimates and ordered the items accordingly.

After a short break for lunch, we convened and the vendor team came with a high level proposal which went something roughly along the following lines.
“Based on our experience on similar projects, we believe that we can burn through approximately 8-12 points per two week sprint, with a team initially made up of 6 people, consisting of the following skill sets… At this rate we will burn approximately £x per sprint. We can spin up the project team in 7 days from now and based on our projections believe that we will have finished the following core feature group within 5 sprints and, depending on your changing requirements, would expect to have to allow for another 5-10 sprints to complete the project costing in total approximately £y. Our proposition to you is that we collaboratively work together to deliver maximum value to your business and minimize the overhead associated with contract negotiation and administration. We pride ourselves on building quality in, engineering best practices, and the ability to deliver incremental and iterative results that deliver business value to our customers. At the end of each sprint we will demonstrate our progress in the form of a live demonstration, and our promise to you is that if at you are not happy with work completed during the previous sprint you can cancel the project and we will not charge you for the work completed during that sprint. Alternatively, if you decide to pull the plug during sprints 2-5, we will only charge you 50% of our standard billing rate. In return for the risk we take on in this project, we require a dedicated resource from your business who knows your business and is willing to work alongside our team who can take on the role of product owner on the project. This person must have the appropriate authority to make decisions unhindered on a daily basis. Finally, as we will be building out your solution iteratively, you will be in a position to change your product requirements, as your business requirements change thus allowing our teams to focus on delivery of maximum business value.”

Now, from a client perspective, in an ideal world, this sort of proposition is almost impossible to turn down because there is little or no risk associated with ‘giving it a go’. They are in a position where they can pull the plug on the project risk free, or for significantly reduced rates. From a vendor perspective, the cost associated with the client calling the refund option is offset by a reduction of effort required for the sales pitch, and can hopefully be absorbed by a successful business that is delivering other profitable and exciting client work. Furthermore, this approach sets the project up for success from the start, incentivizing both the client team to engage more effectively, and the vendor team to deliver business value more quickly.

Agile contract negotiation is an inherently complex process because a potential buyer is not used to or generally comfortable hearing: “We will work time and materials, it will cost you approximately this much per sprint, and we think it will take about this many sprints but are not really sure. Furthermore, we don’t know exactly how long it is going to take, or what we are going to deliver”. For a start, this is an incredibly ineffective way to approach the situation and most sane people know this and either sell the project fixed price with the proviso that the customer can change their mind, which is highly risky and changes peoples behaviors for the worse, or they try and say the same thing a different way ultimately confusing the client and the project team. Furthermore, in my experience, people tend to use ‘the agile way’ as a buzzword to throw into conversation without really seeing or understanding the real benefits that agile holds over more traditional approaches. My view is that organizations should realize some of the benefits of agile (individuals & interactions, customer collaboration, responding to change, working software/delivering business value ect) within the sales process and early on in projects, and develop a culture that supports these values ultimately allowing businesses on both sides of the table to flourish and reach maximum potential.

Original post on Zak Holdsworth’s Conchango Blog.

6management, technology, agile, sales,