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Agencies vs Their Developers: why do creative agencies find it so difficult to estimate software development costs accurately?

By Richard Bundock, Managing director

February 18, 2016 | 6 min read

We live in an age when many creative agencies are currently dropping the word ‘digital’ from the one-line description of their business. Why? Because “everything is digital”, they say; it has become embedded into the very fabric of what a modern marketing campaign is and, as such, their familiarity with digital should be taken as a given.

Richard Bundock is managing director of Cohaesus.

Which is fair enough but, if that is genuinely the way that modern marketing agencies like to view themselves, why are so many still so keen to emphasise their creative credentials over their experience as software developers? In my role with Cohaesus, being the technical partner of choice to dozens of UK creative agencies, I’ve noticed that agency people tend not to talk about being in the software business or discuss things such as development or engineering. Perhaps they imagine that the creative side of the business is a far sexier discussion point than their ability to crunch out code.

However, if digital is truly at the heart of modern marketing, and no one is arguing otherwise, then software is the bedrock of every digital project. That being the case, there’s a strong argument to suggest that many creative agencies need to wake up to the fact that they are actually now a software house in disguise and adjust their internal processes accordingly to better service their clients.

Different strokes

Delivering software is a very different process to the creative process that agencies are used to. Many agencies have been established for many decades and, as such, have years of experience of delivering their creative-led services to their clients and managing their client relationships successfully.

By comparison, the software industry itself is still relatively young and many of the methodologies and process that have built up around delivering software to a brief, e.g. agile development, are even younger. These different processes have been developed as people have come to realise that delivering software that meets client’s initial expectations in terms of scope, cost and time is actually a fairly difficult thing to do.

There are a variety of approaches to building software to a brief and all of them are valid depending on the project and the situation, however two of the most prominent approaches to date have been Waterfall and Agile.

With a Waterfall development, the project follows a sequential process with each stage fully agreed upon and signed off by the client before moving on to the next stage, e.g. specifying the scope of the project, agreeing upon the UX, the design and so on, getting nearer and nearer to the final delivery. This can be slow and time-consuming and, because you can’t go backwards in the process, means you can’t really test the software until it is fully complete.

In my opinion, however, software is often best built using an Agile methodology, delivering smaller units of work over short periods of time, constantly iterating and testing to ensure that the work delivered is in line with the client’s goals and expectations. This is very different from Waterfall in that you don’t have an overall fixed scope and this, in turn, makes it extremely difficult for agencies more used to delivering creative services to accurately estimate the cost of development.

Techies talk too!

Over the years, I’ve seen creative agencies provide estimates for software projects that have varied wildly from the project’s final costs. While very occasionally projects have been brought in for roughly 25 per cent of the original estimate, others have run massively over budget by anything up to 400 per cent! Even given the layers of uncertainty surrounding the delivery of any software project, why are professional agencies capable of getting their estimates so wrong?

The simple reason is the volume of relevant parties and the level of collaboration required in developing software to a brief. All too often, highly relevant individuals, usually of a technical persuasion, are kept at arms’ length from clients and can be left out of the loop while crucial decisions on the scope and cost of a project are signed-off with clients by under-informed account managers. If estimating the cost of a technical project is pushed on to non-technical staff — and it frequently is — it’s easy to see how things can go wrong.

One of the main complaints that agencies have traditionally had about employing software developers in-house is that they are only good for coding, which is why they are frequently left out of the client liaison process. However, a recent study of thousands of projects within the software industry revealed that, in actual fact, a maximum of 30 per cent of a typical software developer’s time is dedicated to coding, with the remaining effort expending on tasks such as requirements, prototyping, documentation, unit testing and technical management.

The lesson for creative agencies is clear: if you want to provide your clients with clearer, more accurate estimates in relation to digital projects, let your techies out of the box marked ‘coders’ and involve them more closely in the process assessing the requirements of software projects and managing client expectations.

Richard Bundock is managing director of Cohaesus.

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