Thursday, September 27, 2007

A tale of two companies

Once upon a time, there was a company S whose key business was delivering technological and engineering projects. Since company S was closely-related to the local government, most of company S’s projects were also government or military related.

And then one day, there was this multi-million-dollar project opened for bidding. Company S was interested in the project, but did not have the technological abilities to develop it. Thus, company S decided to partner with an overseas company X, even although company X did not have a ready solution at that point of time either. As a result, the two companies secured the project, with company X as the main contracter and company S as the sub-contracter.

Company X then started with the design of the architecture down to each individual components. As fulfillment of the partnership requirements, company S sent a few young software developers over to company X to assist the developments. These young developers of company S were then deployed to work under the various group leaders of company X, throughout the development stage. However, due to the lack of experience of these young developers, they were not involved in any software design and rarely touched on the development of the core components of the system.

After the project was delivered, these young developers returned to company S and were subsequently dispatched to other different projects. Over the years, most of these developers eventually left company S, or proceeded their careers as managers. On the other side, company X retained all the architects, designers, technologists and developers of the project, and immediately proceed to develop version two of the system.

A few years passed by, and the customer decided to upgrade their existing system. This time round, company S and company X approached the customer separately. Company S presented to the customer their ideas and past track records. Company X also presented their ideas and past track records, but on top of that, they also gave the customer a demo on the version two of their system, which was a much improved system that met most of the customer’s requirements. When asked to quote for the project, company S quoted a figure and timeline equivalent to that of developing the project from scratch. Whereas company X quoted a much lower figure and timeline, due to their possession of an advanced system baseline. Needless to say, company X got the project.

The mistake made by company S was what I had often critised about. That is, they failed to capitalize on their initial advantages and build up their own technological and intellectual assets. Company S managed their company from a short-term business aspect, while company X managed from a long-term technological aspect. Many local companies that I have seen are making the same mistake as company S, just that most of them don’t have the financial backing and customer relationship of company S to survive the mistake.

Labels: ,