How can a software agency deliver quality software/win projects? [closed]

Question

I currently work for a bespoke software agency. Does anyone have any experience of how to win well priced work?

It seems there is so much competition from offshore/bedroom programming teams, that cost is extremely competetive these days. I feel that it is very different compared to a software product company or an internal IT department in terms of budget.

As someone else said before, we only ever really get to version 1.0 of a lot of our software, unless the client is big enough. In this case it doesn't make business sense to spend ages making the software the best we can. It's like we are doing the same quality of work as internal IT staff. Also a lot of our clients are not technically minded and so therefore will not pay for things they don't understand.

As our company does not have the money to turn down work it often goes that we take on complicated work for far too little money. I have gotten a lot better at managing change and keeping tight specs, etc. It is still hard.

Edit-----------------------

Almost 3 years on from this post and I can list some important lessons that I have learnt since then.

Please see below for my answer

Answer 1

If you are concerned with doing too much work for too little money then work on an hourly basis. Yes, that is harder to sell in most situations.

Maybe you can try a two-phased approach instead. Have a very short initial engagement where the deliverables are very specific requirements documents that become the property of the client. You risk having to compete for the actual development but you take away the risk of pricing the project too low because you will already understand what the client is like to work with, as well as, the application requirements.

Once you win the work at a fair price then use the best practices suggested by mathieu to help ensure quality and productivity which both lower the cost you incur.

Answer 2

What you described in your post, (not your question), I think is a sales, management and marketing question first and foremost.

You say that your clients are not technically minded, this will require to have a cohesive sales, consulting and communications strategy, this isn't about programming skills.

Also, if your company constantly accepts projects that are too complex or expensive for your team, and you deliver low quality products you'll sooner or later be stuck in a hole. You will attract customers that you do not want, and existing clients will be turned off by your 'incompetence' and sooner or later find another company on which they'll try to play the same price game. Those clients are worth nothing in my opinion.

You ask 'how do you win well priced work'? People are social animals, they talk with each other. If there's a market perception that you are an unreliable company, people and future clients will sooner or later know. Customers don't care whether you offered them a product at a really low price, on a too tight schedule - It's not really their error, it's you who accepted it. So once again, I think whole ordeal is a bad business practice.

I found that you really have to define tight specs on jobs with low budgets, define what you will and can deliver, tell them the price, stop your boss from offering too many long term customer discount price tags because they are too afraid to lose the client. Communicate early and often when things start to get out of hand. Write precise offers for additional features. Write these precisely down, don't rely on phone conversations (you: "that's an additional 4 hours of work", client: "ok"... 4 months later, client "what was that again??? why am i supposed to pay for this").

Now of course, one way you keep prices down is by not hiring complete morons that might be initially cheaper than better qualified programmers. This is a shortsighted approach and will fail miserably.