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Why Continuous Teams Outperform Fixed-Price Projects in Design Consulting?

11/04/2024

As a designer in the IT consulting world, I’ve seen how different project approaches can shape outcomes — not just in terms of deliverables, but also in the value we bring to our clients. 

Common buying strategy for clients is to break design work down into smallish, fixed-price projects that can get budget and can be competitively bid. Surely, this makes sense: a sense of a bargain price, feeling of control over scope, clear deliverables, and not being too dependent on one vendor.

But is this really the best way to maximize value?

From my experience, the real game-changer lies in integrating a dedicated, continuous design team(s) into the client’s ecosystem. 

Here’s why:

Buying the right solutions

In the traditional project model there is a significant risk that initiated projects may not be the most appropriate or worthwhile ones. Upon closer examination, it might become evident that these bidded projects do not align with the strategic needs or priorities delivering the greatest value. Vendor might realize during the bidding process that the client is pursuing the wrong solution. However, convincing the client and adapting the offering can be extremely challenging, if the criteria for purchasing have been set based on flawed assumptions and premises. As a result, both parties may find themselves locked into a misguided course of action. So, buying the wrong project prevents delivering real value, and in addition, it causes pain during the project because it’s difficult to succeed with the set project scope, timeline and budget. 

Continuous design team avoids these rocks by building the project roadmap on solid current state analysis and by agilely adapting to arising needs and discoveries.  

Synergy between projects + strategic collaboration

True synergy is something that’s impossible to achieve when projects are fragmented across different vendors or teams. Instead, a stable team develops natural synergy. Lessons learned in one project are directly applied to the next. It’s self-evident that this creates efficiency. Remarkable is that it also upgrades the quality of deliverables: it enables deep domain knowledge, systemic thinking over single project scope and productive relationships. Consulting transforms from a distant external view-point into in touch with the client's realism.  

While buying, clients obviously consider impacts versus costs. However, making the analysis based on the project costs can be misleading. At least, looking at the Total Cost of Ownership is needed to reveal the hidden costs of fragmented projects over time. How much does it take to maintain constant buying, ramp-ups, delays, rework etc? Then there is also an Opportunity Cost of the strategy not chosen. Will there be missed business results due to lack of holistic design?

Knowledge retention + flexibility + risk mitigation

A continuous service design team carries forward the history, preferences, and even the nuances that often get lost in handovers. Regular retros and open discussion about working methods and processes reduce the risk of misalignment and rework. Team can pivot quickly in response to changes and adjust to new business needs with less ramp-up time. Working hours can be scaled up or down. 

Economics of scale + value

When working in the traditional project model, high capability to learn would bring economies of scale to the vendor. But, when working in the continuous team model, this brings economies of scale to the client. There’s more high-value consulting per invoiced euro.  

How about the value in numbers?

Yes, continuous engagement might seem costly upfront. It is a continuous cost! We all know what happens to our economic balance if we just subscribe and subscribe recklessly. 

But when you factor in the long-term benefits, investing in a continuous team offers a better cost-benefit ratio. In my recent experience, our continuous team was able to deliver far more than what would have been possible through isolated, fixed-price projects.

Cost vs. deliverables is easy to count

During the past ten months with our continuous design team, we have delivered:

3 major projects, 
2 smaller projects,
and contributed significantly to 6 more working streams

– all of these building a wholeness that could be phrased as improved customer experience and more desirable and viable digital business.

This amount of doing was achieved approximately by the price of 3 isolated projects, each having a six-week scale.

In terms of doing and deliverables, this calculation is a big win to the client.

But what was the value of doing? 

On the highest level, clients tend to have objectives such as creating the most relevant and competitive services, or smoothest and the most efficient processes. For the business, succeeding in these endeavors might be existential. But the true value of progressing these goals is hard math. Monetary calculations are rough estimations and they don’t reach all aspects of the value.  

However, as a business leader, I’d want the most dedicated and deeply informed people contributing to these existential goals. I ponder whether someone passing by in a few months has that dedication – or if the client’s context is truly learnt during the first weeks of the project. This cuts down the full capacity of producing value. Especially when a huge learning curve causes cognitive stress hindering the brain and reducing elastic thinking.

In my experience my engagement to the client deepened due to closer relationships and sharing long-term goals, yet especially by gaining a deep understanding of their context. Feeling profound expertise was elevating and relieved the generalist’s imposter syndrome. I probably performed better and also felt better.

That being said, there’s humane value for people in being a part of the team welded together, feeling ownership and working for the greater cause than one single delivery.

When the continuous team outperforms

Based on my experience, I’d say there are some indicators showing when the continuous team outperforms a project-model:

  • Business & Service Design maturity of the client organization is on the lower steps of the scale
  • Business operates in many markets, customer segments, and through several services and touch points
  • There’s a lot of incremental product development to be done
  • Customer journey is being transformed with new services

However, the best model in my experience seems to be a hybrid model, in which there’s a continuous service design team but occasionally some specific needs are projectized as separate projects. These separate project teams include people from continuous teams to secure continuum and synergies, but also additional people to build a specific expertise combo.  

Making traditional design projects more productive

Despite the great experiences with the continuous design team, I expect to have a lot of project work in the future. Again and again we are facing the challenges of building new teams, and ramping up shared approaches, methods, procedures and processes – under the competitive price tag. It would be beneficial for an agency like us to crack how to make our design project deliveries more productive. 

Organizing the co-work

What our design project business could learn from the continuous design team experience is that we could organize ourselves into working pairs or working groups who build their coworking beyond an eight-week horizon. They would have retrospectives and cumulative learning from delivery to delivery. 

Productizing the service

When talking about productizing design work, we designers tend to believe that each delivery is so unique that the work can’t be standardized. However, working in the continuous design team has proven to me that we can utilize once built methods, processes, templates, tools and devices a lot from situation to situation. In the continuous team setting I would feel dum to start each project from the empty Miro-board. 

Strong DesignOps

This brings forth a quest of productizing the relevant design offering and having a strong DesignOps. And I don’t mean just a collection of once used templates, but building a well-engined design product that experts iterate together to create economies of scale as well as consistent quality. This is not rocket science, but it needs investing in internal development work, something that in our line of business is often difficult to do.

But you can’t ask for the moon

However there is a part of the knowledge that is almost impossible to institutionalize, and that is the deep context and customer understanding. This knowledge builds from experience over time, it’s impossible to grasp from the briefings. Sometimes clients believe that buying from the same vendor brings back either the same people or the same understanding, but sadly this is not the case. This asset is built best in the continuous teams.

Conclusion

With my experience I would suggest organizations to consider the way they organize and buy design work. Maybe it would be possible to test the continuous design team and the hybrid model and compare long-term impacts versus costs in, let’s say, one to two years spectrum.

For agencies like ourselves, I would suggest reconsidering the offering as well as organization of the design work, plus really investing in team building, productizing and DesignOps.