{"id":9696,"date":"2022-01-03T07:00:04","date_gmt":"2022-01-03T07:00:04","guid":{"rendered":"http:\/\/TheNextWeb=1375864"},"modified":"2022-01-03T07:00:04","modified_gmt":"2022-01-03T07:00:04","slug":"dont-let-shrinkflation-affect-your-software-development","status":"publish","type":"post","link":"https:\/\/www.londonchiropracter.com\/?p=9696","title":{"rendered":"Don\u2019t let \u2018shrinkflation\u2019 affect your software development"},"content":{"rendered":"\n
<\/div>\n

You might not have noticed, but the products you\u2019re buying at the grocery store are getting smaller. That\u2019s right: They\u2019re shrinking. In the wake of the COVID-19 pandemic, which sent raw materials prices soaring, many companies are trying to find ways to cut costs.<\/p>\n

So if that box of Cookie Crisp (part of a balanced breakfast, they say) feels a little light, you\u2019re not imagining things; General Mills has decreased<\/a> its family size boxes from 19.3 ounces to 18.1 ounces.<\/p>\n

Economist Pippa Malmgren coined the term \u201cshrinkflation<\/a>\u201d to describe instances where companies reduce the size of products while retaining prices. However, prices aren\u2019t staying the same. In May 2021, global food prices<\/a> were the highest they\u2019ve been since 2011.<\/p>\n

While the Federal Reserve insists<\/a> the current period of high inflation is temporary, the ripples are being felt throughout every sector of the economy, including software development<\/a>.<\/p>\n

If you think \u201cshrinking\u201d the amount of effort you put into projects is the best way to keep prices low, you\u2019ll end up harming your company\u2019s integrity and failing to meet client expectations. That\u2019s not the right way to deal with inflation in the software development industry.<\/p>\n

The state of professional services<\/h2>\n

For some C-suite decision-makers, there are few options but to increase the charge for professional services. Firms are grappling with pressure to decrease professional services costs, increased competition and commoditization, and the rising cost of talent. Some of these pressures have been mounting for years, while others directly result from the recent economic downturn.<\/p>\n

Thankfully for those of us in the software development space, there were fewer obstacles during the pandemic due to the demand for digital innovation. The surge in remote work made software vital to businesses\u2019 survival.<\/p>\n

According to an IBM survey, the pandemic accelerated digital transformation at 59%<\/a> of organizations. Additionally, the Worldwide Developer Population and Demographic Report indicates that the number of developers increased by 2.5%<\/a> in 2020 (albeit slightly less than the projected growth of 4%).<\/p>\n

The amount of money being poured into digital transformation could balloon to more than $2 trillion<\/a> by 2022. According to Twilio, 79% of companies<\/a> claim that COVID-19 increased their budget for the effort. Maybe this will make some of the laggards get off the proverbial pot.<\/p>\n

\n

Sidebar: The ridiculous thing about digital transformation hasn\u2019t changed. It\u2019s not a process with a defined end. Business owners will never wake up and discover that \u2014 poof! \u2014 their companies are transformed. It makes a lot more sense to view it as an ongoing process. (I\u2019ll step down from my soapbox now.)<\/p>\n<\/blockquote>\n

Organizations still have plenty of work to do, which bodes well for your business despite software industry competition. Your best-in-class digital services are the key to meeting executives\u2019 digital innovation goals.<\/p>\n

Cost, which has historically been the main factor<\/a> impacting business decisions regarding technology investments, should theoretically become a smaller barrier.<\/p>\n

However, something about this shift feels different. I\u2019ve been in software development for 15 years. My advice? Make sure you can compete in the modern market.<\/p>\n

How to best compete in this market<\/h2>\n

Researcher Aaron O\u2019Neill estimates 2021\u2019s global inflation rate to be 3.5%<\/a>, which is significantly higher than 2016\u2019s 2.7%. In the US, professional services experienced an average annual inflation rate of 4.86%<\/a> between 1961 and 2021.<\/p>\n

Considering other professional services are experiencing increased demand \u2014 CNBC reports<\/a> that home renovations will cost more and take longer \u2014 it\u2019s safe to assume the inflation rate will rise in the software development space as more businesses invest in digital innovation.<\/a><\/p>\n

While shrinkflation might work in business-to-consumer industries like food and beverage, it\u2019s not a tactic you should use to combat inflation.<\/p>\n

Clients need software products that thoroughly address their pain points and improve existing workflows. If you\u2019re producing something that\u2019s ineffective, you\u2019ll see fewer repeat customers and likely experience a decrease in revenue. No one wants that.<\/p>\n

Assuming this pricing spike is inevitable, how should you decrease how much you charge for professional services moving forward? Here are my three tips:<\/p>\n

1. Embrace new tech that will attract top talent<\/h2>\n

Top talent can be 400% more productive<\/a>, according to a study in Personnel Psychology. And if your workers are more productive, you\u2019ll see increased profits<\/a>, according to Gallup.<\/p>\n

But how do you attract high performers? By focusing on emerging technologies<\/a>. These technologies can make existing processes more efficient, but they can also act as a draw for talent.<\/p>\n

Software developers are looking for companies that are the \u201cnext big thing.\u201d Artificial intelligence, blockchain, and more will inevitably shape the world in countless ways. Top talent wants to drive that change.<\/p>\n

Increasing investment in and commitment to AI is now a necessity. What looks like magic to your competitors in five years is actually the result of today\u2019s good planning. And AI is not a set of niche technologies \u2014 it is most effectively deployed horizontally across an organization.<\/p>\n

According to Boston Consulting<\/a> Group, digital laggards tend to view AI as a standalone solution, which limits its effectiveness in their organizations.<\/p>\n

2. Invest in your current employees to keep them around<\/h2>\n

Workplace culture might be hard to define or quantify, but plenty of studies show that close-knit teams and inclusive office environments are associated with higher levels<\/a> of employee engagement and productivity. And as I mentioned before, productivity improves profitability.<\/p>\n

This isn\u2019t to say you should underpay or overwork your employees. That mistake can result in poor performance and turnover, which is counterproductive to your goal.<\/p>\n

Rather, you should make sure your firm values workers\u2019 contributions, rewards them, and continually presents them with new opportunities for personal and professional growth. Nothing beats working for a company that genuinely supports its employees.<\/p>\n

3. Put in the work upfront<\/h2>\n

According to George Cressman, president of World Class Pricing, \u201cDelivering professional services requires great skill in diagnosing customer needs and understanding the relationship between very diverse components of a customer\u2019s business. It requires skill in tailoring a solution to precisely meet a customer\u2019s needs, and communicating that effectively.\u201d<\/p>\n

In short, your clients will be far more excited to work with you if you do as much of the discovery work for them as you can. The corresponding savings in software development costs can mitigate the impact of the current inflationary trend.<\/p>\n

When you can hand your new partner well-defined personas, highly relevant user journeys, accurate requirements, and in-depth market research, everything moves faster. This upfront heavy lifting won\u2019t eliminate the need to recalibrate once projects are underway, but it can reduce the number of steps from start to finish.<\/p>\n

Even though it seems counterproductive, software development consulting rates can keep the overall cost of the project down. Moreover, with a detailed plan<\/a> in hand before development begins, clients can be assured that you\u2019re building the right thing the right way.<\/p>\n

To be frank, software development is expensive<\/em>. It was expensive two years ago, and it will be expensive two years from now.<\/p>\n

Resisting the urge to raise your prices will help you stand out among your competitors. If your work is clever, comprehensive, and cost-effective, your business will reap the benefits of what could be a prohibitive trend for potential clients.<\/p>\n

Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

You might not have noticed, but the products you\u2019re buying at the grocery store are getting smaller. That\u2019s right: They\u2019re shrinking. In the wake of the COVID-19 pandemic, which sent raw materials…<\/p>\n","protected":false},"author":1,"featured_media":9697,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/posts\/9696"}],"collection":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9696"}],"version-history":[{"count":0,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/posts\/9696\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=\/wp\/v2\/media\/9697"}],"wp:attachment":[{"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.londonchiropracter.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}