Saturday, December 12, 2009

Business Model

Every company has a business model. It can focus on selling a product, selling accessories for the product, selling support, etc.

One type of model is the "consultation" model, it's used when the product the company sells is sold for near to nothing, but the company still has to make money somehow, so the company presents you with experts that will help you through every phase of the implementation.
Now there are two options - the consultant gets paid either on a per project basis or on a per hour basis. The per project option is OK, but it's highly unprofitable for the company - it's never a good idea to commit yourself to an amount of work you don't know how to translate into time(==money).

The per hour option is problematic from the client's side. A "good" consultant from the company's perspective is one that can do the same work for the longest amount of time - to me it seems to contradict professionalism, but that's not my point here - that kind of consultant has no motivation to do his work to the point and as effective as possible or even answer questions on the phone - every question can be seen as something that should be thoroughly discussed on the client's site (and expense).
Now, with support things are easier - if a client feels dealing with a support issue is taking too long he concludes there's a problem with the company, and that's obviously not so good for the company. But consulting taking a long time can easily be painted like a good and thorough work on behalf of the consultant, and since the client often really doesn't have a good idea about the product he can be easily fooled.

Another pitfall you should beware of when taking on a software project.

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