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Guide

Talking with developers: how to create a proper statement of work? Supply Chain example

Interrogations between people have never been easy. But while the common fuss won’t have much influence, the miscommunication during business negotiations may become a complete failure. Let’s discuss today the very basics you may need to know while deciding to order the software development. For the best experience, we have decided to show you a real case using our services which is Supply Chain management system development.

What are the common problems during negotiations?

Pitfalls during negotiations

This is the most essential part of doing business. The art of negotiations literally is used on a daily basis. And depending on the master level, one can guarantee the success of the deal. However, if we dispute about software development negotiations they also include drafting of the SOW (statement of work). Though this is where most of the problems start and the endpoint, or better say “beginning”, of the great misfortune. So what are the key pitfalls that may occur during negotiations between customer and contractor:

  • Business-idea

    You will face issues during development with 100% rate in case you don’t have a clear awareness of your business idea, or even don’t have it at all. It’s practically impossible to create a well-built product in reasonable terms. If you aren’t sure that you can convey the key points of your project, we recommend including business analysis in SOW too. Therefore, a professional business analyst will design for you a rough draft of UI/UX and a set of features.

  • Ideas vs Solutions

    Another pitfall usually goes onto the decision making of the feature set. While you as a client may insist on full custom development, we as a developer will claim on partial use of some ready-made services. The usage of some already working solutions or previously used parts (if possible) will not only reduce the development time but will also ensure you won’t run out of your budget on the mid-term. Moreover, the use of API and ready-made services in primary development, doesn’t limit the revoke of the system later. You will always be available to improve and scale your product after it gains some weight on the market.

  • MVP

    This point is not that usual or obvious. But while you may wish to have a full-fledge system with several tens of features, we may kindly decline such possibility fitting in your terms and budget. Anyway, we do not recommend spending extra money in the beginning, but to thoroughly weight each feature with a business analyst. And finally, start with a solid minimum viable product. Better have fewer features at the beginning, but ensure the error-free and smooth work of your system.

  • Blockchain

    Blockchain is not simply a trend, but quite a popular and useful technology of the past decade. However, its understanding and awareness are still poor among non-developers. Therefore, one might have issues, one or two, considering the usage of this technology. By the way, below in this article, you will be able to find a visual table, that will help you in deciding whether to adopt the blockchain part inside the project or not.

  • Clients

    You may hesitate now, why do I need to know who is my target audience. You may even think, that it’s not such a big deal “I’m simply making an application for everyone”. However, such an approach leads to unnecessary expenses at the beginning of the project. And this includes not only development but also marketing costs too. Clearly define who is your target market at the start. You may scale the age, gender, and location of clients later on.

  • Misunderstandings

    Basic and common misunderstandings during the dialog between 2 people are not surprising. And when it involves business negotiations (especially development) we meet them even more often. This depends on who is taking part in negotiations. For example, when it’s the developer and the client, usually, they do not meet each other expectations as one thinks technically, while another only understands the business part. Thus, we have a story with a typical plot:

    Client: make it pretty 

    Developer: *makes exactly as he understood*

    Client: I have asked completely the opposite.

    We highly recommend to have a middle man on both sides and/or confirm each recommendation and task.

  • Summary

    The last but not the least important point on negotiations. Always, really we are not joking here, always make a summary for each subject discussed and requested. Notwithstanding you had written or spoken queries, make a record of it. Collect, store such a summary with a date, and defined decision in one place. Therefore, whenever you have disputes or misunderstanding you can refer to a certain document where you have noted all the important endpoints.

By paying attention to all these points you ensure the development and the cooperation itself will be held smoothly and with the least unexpected issues. Those will also help you to correctly draft Statement of Work and will aid you upon your dialogues with developers. 

But how to create an understandable SOW? How can we ensure that both parties understand tasks clearly? 

Today we will answer these questions by explaining Supply Chain management software.

Supply Chain in a nutshell

Blockchain in supply chain

In the first place let’s define what is a Supply Chain and its features. Fundamentally a Supply Chain is a connection network that includes all the possible parties, starting from producer and to final buyer. It may also refer to the “steps” that the product goes through from its original state and to the client. Thus, the Supply Chain management system is any application/platform/system that operates, manages, and records data about parties or the product itself.

{Check our case Supply management system for a coffee shop}

Why should I choose custom-made Supply chain software, instead of ready-made?

You may have seen ready-made services or box solutions for the management of Supply Chain. We can’t say they are bad. Indeed, sometimes their feature list is quite wide and you really have a choice. You may find one or two interesting variants that include everything you need, starting with supply management, warehouse management to customer queries management. 

But are such software that good? Well, we can’t argue their usefulness. However, in the long run, you can’t rely on third-party service as you’re not the one ensuring stable working conditions. Again, you can’t be responsible for something you don’t control. On the other hand, your business depends on how smooth your software works. In addition, the price of supply chain management applications is usually quite unreasonable. As this market is not that wide (in case of solutions variety).

So here are a few more reasons for choosing unique custom-made management solutions.

  • Unique set of features

    By building a completely new application from scratch you are free to choose the amount and type of features you’d like to have inside. Moreover, you are the only one deciding, how it should support your business, in what way, and which goals to achieve.

  • Cheaper and smarter

    It might seem that constructing your own software is much more expensive than using already existing service. However, as the long term investment, it can turn to be much profitable. By having a personal custom-made solution you can ensure its safety and error-free work.

  • Productivity and Security

    While creating custom software, we try to foresee the maximum of issues beforehand. Therefore, ensuring the security and efficiency of the system. We guarantee that all sensitive data and information will be stored according to the latest security standards possible.

  • Support and Scalability

    Your own application will be maintained as long as you wish and require. In addition, while drafting the architecture of the product we ensure that it can be scaled and revoked in the future.

Supply Chain Management Software Features

Key modules and functional

The Supply Chain management system may include the following modules, with a variety that depends on clients’ wishes and business needs.

sow

The most popular modules are

  • Stockpile management:
    • availability management for goods / raw materials;
    • raw materials consumption history;
    • raw materials forecast consumption (for the production of goods);
    • goods sales history;
    • forecast of goods sales based on previously recorded history;
    • automate applications drafting for the supply of goods / raw materials, which are lacking at the warehouse;
    • characteristics and quality indicators for each product type.
  • Warehouse Management:
    • commodity management of a warehouse / several warehouses;
    • raw materials for production, supply management, control, and storage;
    • tracking of the geolocation and goods transfer;
    • space and inventory management for storage of goods;
    • warehouse staff management.
  • Customer requirements management
    • display and analysis of customer consumption statistics;
    • product reviews analysis;
    • customer wishes analysis (regarding products and improvements).
  • Logistics
    • displays the history and statuses of all orders/deliveries;
    • interaction management with transport companies partners;
    • drafting shipping documents;
    • accounting of documents and costs for the transfer of goods (obtaining permits from public services);
    • supply tracking; 
    • confirmation/cancellation of delivery;
    • collection of analytical data on the speed and quality of delivery.
  • Return of Goods
    • management of goods return/exchange queries;
    • accounting of goods that have been returned/exchanged/written off;
    • registration of defective goods;
    • analysis of the reasons for rejection/return.
  • Distributor / Authorized Supplier Module
    • distributors network management;
    • suppliers database management (current/potential).
  • Analytics
    • risk analysis and management;
    • analysis of goods consumption;
    • trend analysis;
    • strategic analysis of production and sales.

It is also possible to add specific modules, depending on customer requirements. For example, workflow management or automated certification module.

Supply Chain Management Systems and Blockchain

We have reviewed the most used and common features of the supply chain management applications in the previous section. However, it’s important to consider the latest technologies too. Blockchain has become the most powerful and used technology in the past decade. You may see a dozen or two of startups using Blockchain. But can it be used in Supply Chain and what for?

In a few words let’s revise what is Blockchain in its core. Basically, when two parties commence a transaction, creates a new block inside the network. After creation, the block is recorded in the blockchain. That’s it, our transaction is done and ledger is updated.

Ultimately, using blockchain technology can drastically increase the efficiency and transparency of almost every Supply Chain part (starting from product ordering, delivery to warehousing). Additionally, due to the immutability of data recorded in the blockchain, we get a steady growth in the reliability and integrity of management systems. Also, as the information is publicly available to all the members of the blockchain network, we get a viable tool to settle any possible disputes. Finally, it just really helps to improve the traceability of management, goods, and services overall.

It’s also worth mentioning that transactions are conducted in just several minutes all within the blockchain network. By using this little trick we can replace various manual processes and increase the speed of work. Lastly, the integration of blockchain reduces your operational costs in long run.

But we can’t say is it worth or not trying to use Blockchain. This choice is only up to you. However, below you can find a small quiz that will help you to decide if you need this technology inside your project.

Do you need blockchain in your supply chain solution?

Basic and mandatory requirements for the creation of SOW for Supply Chain Management Applications

For a more comprehensive picture of the Supply Chain Management Systems and for establishing the set of modules, you need to answer the following questions:

  1. Business type. Do you have production or only sales?
  2. What is the business structure and what its part should be displayed/controlled in the system? Is there a necessity in developing tools for managing the distributors/suppliers/franchises network?
  3. What key tasks of your business should solve the supply chain management system?
  4. What are your key markets? Is there a necessity in customs clearance and does it need to be displayed/controlled in the supply chain management system?
  5. What products do you sell? Categories? What information should be displayed about the product? Do your products have any specifics? What tasks should the system perform in relation to products?
  6. If you have production, is there a necessity to control the production capacities/employees/other?
  7. Is there a necessity in controlling the packaging/loading of goods/transfers within production?
  8. Do you have a warehouse (one or several) that needs to be displayed and controlled in the system? Do you have any warehouse accounting systems integrated? Which one?
  9. Do you already have any agreements with delivery services? Do they need to be connected with the system? Do they have or ready to provide an API for integration?
  10. Do you need any analytics and/or forecasts in the system? What are the important points for your business to display in this module?
  11. Should the system cover issues of governmental regulation/certification? Or will it be conducted outside the system?
  12. Do you need a product evaluation module and an expert role in the system (independent examination for the client)?
  13. Do you need any features for working with customer reviews/wishes/queries? Is it possible to return the goods?
  14. Who will use the system? Provide a list of roles and responsibilities in the system.
  15. Do you need a mobile app or just a web version?
  16. Do you need an offline version?
  17. Do you have any databases/integrations that need to be migrated to the system?

Summary

SOW creation is a complex process that requires time and a basic understanding of the project idea. You should clearly understand the final result. Nonetheless, we recommend to closely cooperate with a professional business analyst on this matter. 

The Business analyst will help you to:

  • Define your needs, pain points and propose the strategy, as well as the effective solutions;
  • Create supporting documents and business models for project development;
  • Investigate a competitive environment;
  • Detect risks and find ways to avoid those risks;
  • Analyze governmental restrictions and limitations due to the project’s domain;
  • Process change requests;
  • Support the development process and consult a team.

We also recommend drafting several versions of the tasks(features) to be done, from the minimum needed to the maximum you wish. Thus, if you will have some spare money and time developers will be able to add some extra features. Do not forget to prioritize them in order to make the choice easier.

If you are interested in Blockchain development or creation of Supply Chain management systems particularly be free to contact our team via [email protected].

We look forward to cooperating with you. Get project assessment and help in SOW drafting from our business analyst today!

DO YOU HAVE ANY QUESTIONS?

LET'S DISCUSS! BOOK A CONSULTATION WITH OUR SPECIALIST


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