A few Internet minutes ago, it was easy to exit corporate offices with banknotes bulging from every pocket. All it required was a working knowledge of HTML, a nodding acquaintance with graphics design -- and a "you can't win it if you're not in it" mantra.
Times are tougher nowadays. Web designers still in the brochure and billboard space face cut-throat competition and ever-shrinking margins. Developers morphing into the greener fields of "full-monty" e-business solutions can't breathe easy either. Hanging on them is an industry legacy of over-promises and under-deliveries.
Such worst-practice methods can lose friends and alienate clients. Note the experience of computer distributor Tecksel. "We didn't want e-commerce; we just wanted to get our prices on the Web for our dealers and then proceed bit by bit," recalls Tecksel director Niels Kofahl.
Tecksel's first applicant for the job arrived with a "we know best" attitude, gold-plated prices and one standard approach into which Tecksel was expected to fit. "Their minimum charge before they'd even start talking was $50,000," says Kofahl. "I could easily see the process going to $200,000 with no light at the end of the tunnel. It would have turned into an endless drain on resources."
Tecksel finally hired a young contract programmer to do the job on a piecework basis -- with the sequence of pieces under Tecksel's control. "It has come in at about $20,000 to date," says Kofahl, "It fits our business perfectly and has a lot more features than the system offered to us in the beginning."
With maturity, the industry is adopting cost management strategies and best- practice methods which promise to make experiences like Tecksel's the exception rather than the rule. Here is a list of cost-efficiency tips and techniques culled from industry players.
Listen up
The first step is essential -- get the customer brief crystal-clear, says Tony Sharples, managing director of Unique World, a 40-person e-commerce solutions company. "In terms of project costs, the main thing is to get the business logic right. You have to work on the principle that clients know their business better than you do, and then help them get that vision out on paper. The days of taking a client brief and saying 'bugger off, we know what we are doing' have gone."
Adds Hamish Turner, former CEO of Web design company Hyro: "Businesses budget a certain amount of dollars for the development of their site. Once you understand what they need, be honest with them about what can be delivered for that price."
Extra time spent on a project's analysis stage translates into less grief during the coding phase.
Recycle that code
Component reuse is standard practice for mainstream IT programmers. The necessary discipline for reusing code may not come naturally to those Web developers who have not come out of the professional IT space. But the concept, as a cost-saver, can be extended too far if it becomes the inhouse equivalent of an off-the-shelf package.
"That is the sausage machine mentality -- where the customer is squeezed into a mould to suit what you have coded up for your first half-dozen business projects," says Joseph Suhr, a director of e-business company eLogic. "This is often the area where customer complaints about not listening closely enough come from."
The industry just can't knock back work. And with too much on their plates, developers "can do the first couple of jobs, then the rest fall in a heap and everyone gets upset," says Suhr. "We reckon you need to have 25 per cent of your capacity just sitting there. It can be occupied in development that doesn't have a critical time frame, but you need to be able to call on it when the big jobs come along."
Keep clients in the loop
Unique World's Sharples says: "Our methodology is to do a functional spec and have the client sign-off, and then a technical spec and a sign-off. Not until the client is signed off on both of them do we go near the design work."
According to some developers, the look and feel design phase is where it is particularly important to build in a number of review sessions followed by a client sign-off. It saves expensive flip flops later on.
With so many products -- such as Silverstream, WebSphere, Cold Fusion, ASP, SQL Server, Java and Oracle -- all jostling for market share, reducing the number of development environments that must be supported is a critical issue.
Each one adds another layer of fixed costs, not just in building a Web site but in supporting later versions and maintaining skill sets into the future, says Michael Kean, CEO of the Eclipse Group (a partner of professional services consultancy Deloitte Touche Tohmatsu). "People underestimate the costs of supporting new versions and of maintaining skill sets." One consequence of controlling costs in that area means "you may have to walk away from some opportunities [which involve non-supported platforms]."
Some developers are even looking at a single common environment such as Jade, an object-oriented programming and development environment that came out of the mainframe world. Mark White, vice-president of B2B exchange builder OZeCorp, believes Jade will radically simplify the process of developing Web applications and trim costs by removing the need to support a wide variety of partial solution platforms.
Manage human resources better
E-solution companies involve design and analysis divisions, programming and graphics design teams, plus branding and marketing specialists. Bringing those disparate competencies to bear on a client's project can be a huge challenge. "Doing this correctly is one of the strengths of professional services firms, says Eclipse's Kean. "The range of competencies you need is far broader than people realised, and how you must organise yourself to bring them together is something we are just learning how to do."
It doesn't really fall under cost-saving, but office atmosphere and culture have a strong bearing on productivity in the Web space. People can't be convinced to work hard -- they have to convince themselves. The right kind of motivation can be summed up in one sentence, according to Greg Baxter, a director of Xession, a growing 15-person e-solutions company in Brisbane. "You have to pay them reasonable money, give them interesting work and have somebody cool sitting at the next desk."
Developers still in demand
by Pete Young
Web labour costs should be fluttering earthward like wounded birds. Every dot-com that downsizes or capsizes feeds more Web-hardened graphics artists and programmers back into the general talent pool.
Given the number of struggling startups rationalising their ambitions along with their staff count, how large a dip in the hourly rates commanded by programmers are we talking about here?
Under the laws of supply and demand, "it's a rational conclusion to draw that the rates should be lower, but we haven't seen it happening," says eLogic director Joseph Suhr.
Allowing variations for locale and proficiency, prices in the $60 to $100 per hour range for Web programmers haven't been eroded by the downturn in dot-com fortunes. In fact, "the rule of thumb is that if you can get good Web people for anything under $100 an hour, you are doing well," says one Sydney corporate webmaster. And those lucky or clever enough to have skills sets in hot demand can command up to $2000 a day.
Under those headline trends, however, subtle shifts are tilting the balance of power toward employers. They are being slightly pickier about whom they choose and potential employees aren't leaving offers hanging as long. "Rates haven't dropped but there is a lot more product on the market, so we have a wider range to choose from," says Scott King, Queensland manager of recruiting specialists Ambit Technology.
Simon van Wyk, managing director of Hothouse, believes a more pragmatic attitude is surfacing among job seekers. "Until April, anyone lucky enough to be working on a high profile job thought they were worth a fortune," he says. "They all had million-dollar stock options on their minds."
Ian Davies, MD of Odyssey Development, says stabilisation is taking place even if rates aren't actually falling. "For awhile there, programmers were on an upward spiral as they went from dot-com to dot-com. The offers, expressed as share options and equated with real money, were getting more and more ridiculous," he says. But since the market adjustment, "the reality has dawned on people that if the offer is absurdly good, there probably isn't a lot of real substance behind it."
Constant Demand
Another reality is that it will be a long time before the amount of talent in the upper stratum of Web skills sets tips into over-supply mode. "There has been no great influx of top-level people into the market," says Mark White, vice-president of strategy for expanding Brisbane B2B developer OZeCorp. "Even with all the retrenchments going on, there is such a dearth of skills we still have a lot of trouble finding even mid-level Cold Fusion-type developers."
It seems the Web development space, like the stock market, isn't always governed by the rules of logic.