ERNI Evert Smit

Evert Smit
Principal Consultant, Strategy, Change Management,
Digital Transformation and Data Intelligence
ERNI Switzerland

 

How can I develop reliable software and increase the value for my company? This is what many companies ask themselves. An outcome-based collaboration may be the right option. Other terms describing this way of working while software development includes agile contracting or story point pricing. So what does it mean in real life? Customers often face the challenge of the software not having sufficient quality, the involved people are not engaged enough and the velocity tends to vary, meaning one time having 30 stories done and the other day only 10. With pricing based on time and resources, the tendency is visible, that people do not care about mistakes as also the time dedicated to correcting their own mistakes is being covered.

 

Outcome based collaboration challenges

 

Another challenge in regard to time and resource-based planning is that the only thing set is the price per hour. Other details that are crucial for avoiding misunderstanding are often not communicated, defined, and settled in the contract. Working in shoring the diverse teams has different approaches resulting also from cultural differences which can lead to conflicts. Usually, there is no clear responsibility. In an outcome-based collaboration, the suppliers take over the responsibility for e.g. one year for the delivered story. This way, everyone at the supplier is highly interested in delivering high quality to avoid costs for fixing their own mistakes.

An important KPI for measuring the quality in the outcome-based model is the velocity, an average amount of stories that the team can deliver. This is the KPI and also the capacity that the supplier can guarantee. Together with the customer, there are reference stories defined. This is a trust and relationship basis for the entire collaboration. All other stories are based on reference cases. Stories are delivered according to quality requirements. A story ready needs to be defined as well. This can be, for example, the story that has to be written in English or the story needs to be accepted by the Product Owner.

 

 

It is the team that evaluates the given defined stories, how much points it is worth. Then this is discussed with the customer to find an agreement on the price.

 

Gains for the customer

The customer plans with a number of story points that will be finalised not with the number of people available for the work to be done. This means a higher precision in the evaluation of the outcome. And also of the costs that will be coming up. There are clear agreements that are measurable that causes less misunderstanding to happen. Based on this, also the atmosphere in the team improves. Nobody wants that e,g, in a month 6 people will be working on bug fixing. The customer can deal with the project like a black box. There are things he or she does not need to pay attention to. The customer only concentrates on the delivered outcome.

 

This article is the first one out of a series of three. In the upcoming weeks, we will publish a real case and a customer interview about outcome-based collaboration.

 

Would you like to consult the possibilities and potential for you?

News from ERNI

In our newsroom, you find all our articles, blogs and series entries in one place.

  • 22.11.2023.
    Newsroom

    Recognising trends: An insight into regression analysis

    Data plays a very important role in every area of a company. When it comes to data, a distinction is made primarily between operational data and dispositive data. Operational data play an important role, especially in day-to-day business. However, they are not nearly as relevant as dispositive data. This is because these data are collected over a longer period of time and provide an initial insight into the history or the past.

  • 08.11.2023.
    Newsroom

    Why do we need digital transformation for medical devices?

    For hospitals, it is not up for discussion as to whether they want to digitalise. The increasing age of the population in western countries and the progressive shortage of medical professionals mean that without digitalisation, the healthcare system will not be able to provide the quality that patients want in the future.

  • 25.10.2023.
    Newsroom

    Mastering the challenges of mobile app testing: Strategies for efficient quality assurance

    Discover the unique challenges faced in testing mobile applications and learn how to overcome them effectively. From selecting suitable devices and operating systems to leveraging cloud-based test platforms, test automation and emulators, this article provides seven essential strategies for optimising your mobile app testing process.

  • 11.10.2023.
    Newsroom

    Incorporating classical requirements engineering methods in agile software development for a laboratory automation system

    Traditional agile methodologies can sometimes struggle to accommodate the complexity and regulatory requirements of laboratory automation systems, leading to misalignment with stakeholder needs, scope creep, and potential delays. The lack of comprehensive requirements documentation can result in ambiguous expectations and hinder effective communication among cross-functional teams.

  • 27.09.2023.
    Newsroom

    Unveiling the power of data: Part III – Navigating challenges and harnessing insights in data-driven projects

    Transforming an idea into a successful machine learning (ML)-based product involves navigating various challenges. In this final part of our series, we delve into two crucial aspects: ensuring 24/7 operation of the product and prioritising user experience (UX).

  • 13.09.2023.
    Newsroom

    Exploring Language Models: An overview of LLMs and their practical implementation

    Generative AI models have recently amazed with unprecedented outputs, such as hyper-realistic images, diverse music, coherent texts, and synthetic videos, sparking excitement. Despite this progress, addressing ethical and societal concerns is crucial for responsible and beneficial utilization, guarding against issues like misinformation and manipulation in this AI-powered creative era.

  • 01.09.2023.
    Newsroom

    Peter Zuber becomes the new Managing Director of ERNI Switzerland

    ERNI is setting an agenda for growth and innovation with the appointment of Peter Zuber as Managing Director of the Swiss business unit. With his previous experience and expertise, he will further expand the positioning of ERNI Switzerland, as a leading consulting firm for software development and digital innovation.

  • data230.08.2023.
    Newsroom

    Unveiling the power of data: Part II – Navigating challenges and harnessing insights in data-driven projects

    The second article from the series on data-driven projects, explores common challenges that arise during their execution. To illustrate these concepts, we will focus on one of ERNI’s latest project called GeoML. This second article focuses on the second part of the GeoML project: Idea2Proof.