How to Sustainably Improve Profit Margin at Your Software Development Agency
Improving your margin is an exercise in balancing costs against the tactics you are using to generate revenue while continually working to make your team more efficient.
Part I (this article): Underlying economics and development process improvement
Part II: Financial outcomes, top 10 benefits of low-code platforms, and key challenges which constrain business outcomes
Part III: 8base’s unique, differentiating low-code value proposition and key capabilities
As a quick background, the industry growth is tremendous–it is even called a revolution by many. Why?
1. The underlying economics are based on a low supply of developer talent and high demand for custom software solutions.
2. The productivity gains are clear and significant.
3. Ranges of credible data exist to show measurable results, and long lists of business benefits are claimed by many.
If Low Code isn’t already on your radar, it should be.
What if you could produce 3X as much software with a 3X smaller staff? This outcome isn’t one for skeptics to fold their arms and doubt. It is very real.
We see developers push the envelope on 10X productivity, getting done in two days what used to take 20 days. We also see UI designers and technical business people go through a short learning curve to build an investment-grade, high-scale application without being a trained programmer.
The question is NOT, “Should I go with Low Code?” or “Will I get a ROI?”
The question IS, “Which low-code platform is best for my ongoing needs?”
Unlike our competitors, we provide the best mix of 1) being simple, 2) providing advanced configuration, 3) supporting custom code extensively, and 4) offering open access with open standards while 5) meeting key architect and developer requirements.
8base helps you create value without constraining you—without making you sacrifice functionality that you need to achieve business results.
The goal of improved developer productivity spans decades. In 1953, Fortran was described as, “A program that assembles another program.” Almost 30 years later, Apple HyperCard was called “An erector set for building software.” Fast forward another 40 years, and software engineers haven’t stopped making frameworks, tools, applications, and platforms to increase developer productivity.
So, why the sudden renaissance now?
Again, it can be stated quite simply.
- Supply and demand
- Proven outcomes
- In addition, technology is simply evolving beyond SaaS, PaaS, and IaaS, which have been around in some format for 20+ years.
Much like other revolutionary technologies, Low Code increases human productivity by at least one order of magnitude. How? Let’s go a bit deeper.
One of our customers summed their productivity improvements well:
“The 8base low-code platform helps us produce 30-50% greater results with 100-200% less staff.”
To add color commentary, the industry publishes a full range of results like this, with some claims as high as 100X improvement. Since 100X is quite lofty, let’s unpack the more conservative statement above–it is a very reasonable outcome for many (if not most) businesses.
The following table breaks down the typical software “manufacturing” process in terms of low-code productivity improvements.
As you can see, it is hard to define the exact improvement without a detailed task and time analysis. However, it isn’t hard to believe there are many smaller improvements, a handful of mid-sized ones, and a couple of big ones.
For some companies and departments, the ability to launch 10 small, backlogged apps can create tremendous value. For others, building something powerful in two weeks is a big deal. If you are taking full advantage of every process change above, “10X and beyond” is very do-able.
Read Part II: Financial outcomes, top 10 benefits of low-code platforms, and key challenges which constrain business outcomes
Read Part III: 8base’s unique, differentiating low-code value proposition and key capabilities
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