Rootstrap Blog

The Value Pyramid

The value pyramid is based on the business value chain developed by Michael Porter in 1985. Porter’s detailed version charted the actions and capabilities of a business provides in steps that progress from basic to advanced.

Our tech service pyramid shows the four main levels of the value chain specific to computer service providers: skills, processes, strategy, and vision. Your company might be positioned on any of these levels, depending on your capabilities and your customers’ requirements.

Where value is delivered

Delivering value can be done at a single level or rise to include multiple levels on the pyramid. For example, your client might require the application of your skills to build a software platform as well as a process to achieve the production and integration of the software. But they might not require an advanced strategy or vision from you.

When you know the elements of each level and what projects they best apply to, you can plan a work package specific to the needs of each client.

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The four levels

Skills

The base of the pyramid is technical skills: knowledge, execution, and hard skills like programming, design and build. An example of a service that’s positioned exclusively at the skills level is an offshore software factory that provides staff augmentation to entities that extends to all levels.

Your team’s level of training, ability to use that training, continuous learning of latest technologies, and creative thinking determine the quality of the services you can provide.

This bottom level of the pyramid is the most critical to your company’s success. The depth and breadth of your skills determine how high you can go on the pyramid and the ultimate value you can produce at each of the upper levels.

Processes

The processes level rests upon your skills. It includes the action plans and procedures you follow to get the job done — at project planning, during production and delivery, and continuing in the operations and maintenance phase. With a solid process base that includes agile software development, client collaboration, and your organization’s own sound principles, you can advance to the next level. As an agency, you set the standards, processes, meetings, and pace of your service.

A strong process empowers your clients to become their own best version. Ideally, they participate in planning and development, learn and use your products and services, and continue to be supported by you.

A company that reaches this level can add five times the value or more than a pure service factory. Of course, value is subjective and will ultimately be judged by your clients. Their results and happiness with those results demonstrate how well your process performs.

Strategy

Beyond processes is the strategy level. In this step, you take the time and effort to a deep understanding of your clients’ business. To reach this level, you need the right mix of business, planning, and execution skills and a lot of common sense.

You buy into the client’s vision and become more than a just vendor. As their strategic partner, you can hone, streamline, and creatively expand the skill and process levels to produce the most benefit. When you go the extra mile and make this level of investment in your clients, the added value can become exponential. You’ll know when you’re at this level by the growth your client achieves.

“A vision without a strategy remains an illusion.” Lee Bolman

You can make a difference in their operations efficiency, production value, and continuous operations. A cutting-edge strategy level can deliver a hundred to thousand times the value compared to a factory that operates only on the skills level.

Vision

Vision needs alignment
A company’s goals, values, and mission are designed to guide them to their vision — what they want to become in the future. This high-level image of who they are, where they’re going, and what success means is usually defined by the founders or board of directors. When you reach the strategy level and become an invested partner with an organization, you can influence its vision.

As a consultant at this level, your expertise can guide them to expand their picture of what’s possible for them. Sharing your knowledge of state-of-the-art technology and industry best practices can create a bigger, better future for your clients.

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Where do you stand?

Most development shops and software factories operate at the bottom of the pyramid at the skills-only level. Their client involvement is limited to providing a requested tech product. More advanced SaaS providers develop a solid process and educate clients on why it’s essential to include the processes level in their projects.

At the strategy level, agile software development is becoming the gold standard for computer tech providers. When you collaborate, continuously learn and improve, and build adaptive teams with your clients, you’re positioned to move to the vision level. With their buy-in, your technology expertise can broaden your clients’ view of what they can achieve and put them on the path to get there.

Our Goal

Depending on what our clients ask for, Rootstrap works at all levels of the value pyramid with many different clients. But no matter what level we’re on, we step up and add value to our service. Each step of the way, we work to build synergies through ongoing, close collaboration. Our goal is to gain our clients’ trust, so we can help them achieve their own best results.

“The best way to predict the future is to create it” Abraham Lincoln

Grow with us

We sometimes get clients that won’t let us become strategic partners or even run the development process. Although we can’t add as much value as we’d like for these clients, we respect their wishes and work within their service boundaries. Even with these limitations, we always provide state-of-the-art software and technology.

When clients are open to partnering with us at the process level and higher, we can deploy resources that add exponential value. With our deep understanding of these clients and their trust in our expertise, we can achieve next-level products and services. By working together, we give our clients the tools to grow their enterprise beyond what they’d imagined was possible.

  • If you are the owner of a digital platform and would like to discuss the challenges you face on a technical level, contact us here. Alternatively, you can reach out to anthony@rootstrap.com.

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