7 November 2007
DataArt hosted a second event in the series of Financial Technology Executive Seminars at Harvard club, dedicated to expediting time-to-market as an essential element for successful software development in capital markets. The panel, comprised of leading industry executives and moderated by Alain Sherter of The Deal magazine, drew in an impressive audience, and was followed by cocktails and networking.
All panelists agreed that assembling the right team is one of the key factors in assuring a fast vision-implementation product cycle. Alexei Miller, Executive Vice President at DataArt, noted that the team’s ability to adapt and change, to learn new ways of conducting business according to market needs are critical for mid-size companies.
George Kledaras, CEO of CecilRep, advised against perfectionism. Trying to get a 100% ready product is likely to result in an outdated product, thus if software is 90% ready, it might be a good time to begin testing it with end users. He suggested setting up a fast and frequent turn around feedback cycle, which would allow users to react to even smallest new details.
Greg Besner, CEO of Restricted Stock Systems (RSS), added that engaging first-time clients in providing constructive feedback, and positioning them as partners who have a right to contribute to the architecture of the product, proved a successful tactic for his company, which was recently acquired. John Eley, former CEO of HotSpotFX, suggested spending more time with end users on preparing and envisioning the product, before launching actual development efforts.
Atish Nigam of FTVentures addressed the role of venture capitalists (VCs) in new product development, pointing that they are an excellent force at setting the discipline and defining performance matrix that helps the teams with tracking their progress and remaining on target. At the same time, Atish noted that it’s wise to delay getting venture money as much as possible. In order to receive a fair valuation from investors, a company needs to already have first client installations and a proven business model.
The panelists were asked if outsourcing can effectively facilitate new product development, and several aspects were addressed. Alexei Miller noted that companies which view themselves as experts in sales and marketing are more likely to outsource all or parts of their R&D, while companies that view themselves as engineering/technology experts do so less often.
George Kledaras mentioned that communication processes and domain expertise have been highlighted as the key factors to successful outsourcing of software development, especially in the framework of agile development that is becoming so critical in today’s software world. He also noted that outsourcing is no longer about finding a cheap labor, but it is more about finding the best talent for the job. With only 5% of U.S. college graduates receiving their degrees is computer science and engineering, many software development firms are forced to look for talent overseas, with India, China and Russia producing hundreds of thousands of engineering graduates annually.
In conclusion, the panelists agreed that evaluating effectiveness of outsourcing in software R&D should not be done on a stand-alone basis. Return on investment (ROI) for multiple business initiatives should be measured first, and only then the contribution of outsourcing towards reaching desired ROI should be evaluated.