10 Checkpoints: Pricing Transparency- Software Development Companies

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10 Checkpoints To Increase Transparency In The Pricing Of Software Development Companies

By Syed Zainul Haque March 11, 2021 - 1,649 views
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When we say “Embrace the new ethos of price transparency!”. We mean B2B companies must maintain transparency while charging for their services. But the question is: how many of us are doing so?

When we place ourselves in the shoes of customers, we will be in a perplexing situation and finally lost while searching for the “best software development companies”. We can say non-transparent pricing has corroded the trust of the users. Even if we assume that the users have good knowledge of the software requirements and understanding of the charges involved for the defined services, still it becomes hard for them to reason out the differences in pricing charged by different software development companies.  

If you have ever bought software then you must have faced this:  stuck in-between staying confused about the genuinity of pricing charged and quantifying whether you have cracked a good deal or not!

One major problem highlighted by our new customers often is the reluctance shown by software providers in providing the full financial picture to the client. The reason is: revealing price structure might help the competitor in undercutting them and winning the contract. Another major issue that we see with the vendors is the lack of expertise to quote the price on the basis of the actual worth of the project and not on how much clients are willing to pay. 

In such an industry, where maintaining transparency can make us lose our clients to the competitors, we don’t want to be another “ worn-out business”, because of our trust and quality matters! 

Based on our years of experience with our clients and working on their feedback we came up with the best practices to evaluate and onboard vendor.

1. Understand the Process of development: It is important to assess the process of project development as it shows us the transparency level maintained in the operation. Experience vendor will segment the project’s budget into the following:

  • Project Requirements
  • Team Structure
  • Process Followed
  • Resource Requirement
  • Reporting Mechanism 
  • Risk Mitigation Plan

2. Align the process with the business objectives: The process followed by the vendor and the outcome should be checked. The alignment of business objectives with the forecasted business outcome should be a measure to measure the transparency of the investment.

3. Aligning the engagement model with the project requirements: Different pricing model suits different projects thus it becomes important for you and your vendor to decide on how much, when and how the payment should be. Many such models are the Flexi-hiring model, dedicated team model, fixed price model etc.

4. Creating a clear-cut contract between vendor and customer: Clear contract will ensure transparency by enabling the customer to see what they are paying for. The estimates task and the required budget, a process that will be followed with the requirements of the investment at every stage of project developing should be defined clearly. This will make the customer understand what the money is getting spent more.

5. Checking for the “code-warranty”: “Code of warranty” means a final price won’t change if something happens due to the fault of the vendor. A vendor providing a code of warranty signifies their efficiency in the job.

6. Assess the reliability in the quality process: Vendors must be assessed on the basis of the following metrics to check the reliability of the process with the project requirements. The money spends on each quality process must have a quantifiable outcome. The metrics are:

  • Engineering process maturity
  • Certification
  • Project management tools
  • Visibility of offshore team activities
  • Escalation procedure

7. The vendor has an experience team structure: When talking about transparency in pricing, a reliable and experienced team is linked with it. A team that can deliver the project on time guides the client throughout the development process and has quicker turnaround time worths the pricing of the development cost. Assessing domain expertise is important for price transparency because time is money.

8. Vendor must ensure a steady flow of information: irrespective of time zone, by employing Kanban and Scrum, vendors can ensure the free flow of communication between the vendor and the client. Transparent communication means all the activities surrounding the project is recorded and well-documented. This enhances transparency in the working process which further ensures clients that the vendor is not having hidden cost in the pricing.

9. Ask for the Customer Review: Transparency isn’t completed unless your vendor provides you with reviews from former clients. It is better to check the vendor’s ranking and position in authentic B2B reviews and rating pages such as Clutch and the Manifest. Remember former client speaks all.

10. Check their shared risk plan and the alternative solutions: A well-defined risk management process should be presented in a structured form that also includes the probable risk and the mitigation plan. Proper action plans to increase transparency must be present.

 Final Words

Establishing transparency means fostering trust. Being a software development company, we can recommend the investment to our client at every stage by guiding them on certain aspects such as what to avoid to make the project successful, what is the customer persona, and etc. This value-driven approach followed by us gives us an edge over our competitors. Transparency is our key values and it is the foundation of creating a sustainable product.

Let’s get to know each other and experience a transparent partnership to see where it can lead us to!

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