You don’t lose time that vendors require to learn business domain basics
According to our velocity study, a lack of business knowledge in the development team increases the time needed for one iteration by 25 percent. Compared to the team with a relevant track record, this means your team without specific experience would cost you an extra 25 percent fee.
Among the reasons for such a delay are miscommunication, differing expectations, and the need to rework some parts of the system. Developers struggle to understand tasks and grasp a broader vision, which requires extra effort to help them see what needs to be done. This makes overall processes fuzzier and hampers development. In turn, product owners should go to greater lengths when providing task explanation, planning, and managing risks concerning different expectations.
When a team studies a new industry that is necessary to work on a project, their performance curve increases steadily, meaning they initially require time and money investment to start working at stable velocity. We can provide many more reasons why a team lacking relevant experience is a waste of resources unless they are more intuitive, and there are even more reasons to take into account.
You scale back the number of innovation risks
We know one interesting best practice — allow only one innovation per project at a time. Each innovation — new framework, technology, language, the IP owned by the company — is still a risk for the project. The more novelties you use, the more risks you take, and these are multiplied risk one by risk two by risk three (and so on). For a team that has no experience in your business, significantly more novelties would be in the project, so the risks would be more numerous as well.
If you hire a team more experienced in your business domain, you have a higher chance they will cope with the project. That said, in an area like Fintech that is ripe for innovation, cutting-edge tech, and IP, the number of risks booms; this makes previous experience in Fintech critical.
Experience also means quality and security
Theoretical knowledge and real business may seriously differ. The team you want to hire may have done one or two projects in the Fintech domain and may not need detailed task explanations and guidance. However, every new project is unique, so their experience doesn’t necessarily reduce novelty risks. Having years of experience is a different story. Working with an experienced team with successful cases reduces risks and provides quality service gained through real-life projects.
Security is another reason why experience is beneficial. Fintech projects set high requirements for security standards and clients’ data safety. According to the 2019 CIO Survey, cybersecurity continues its stellar rise in importance, with 56 percent of respondents listing it as a board priority this year, compared with 49 percent last year. In turn, data protection and threat prevention skills require hands-on experience, which can hardly be acquired at the start of a project. In a sense, security is a skill that all your team members should constantly work to master.
Why hiring a team of domain experts works
The strength of a team is measured by the strength of its weakest link. In team management, this statement is still valid. Although having talented leadership with outstanding knowledge in the business domain makes a powerful impact on team spirit and performance, having only a few team members experienced in the business domain can complicate your team’s communication and velocity.
For a team inexperienced in the business domain to understand how to do their tasks, more experienced team members should spend time explaining and consulting less experienced members. By doing so, the time required to accomplish their tasks will lessen. Notice that not every specialist is willing and/or good at educating others; the need to explain tasks may run them down and negatively influence their motivation and productivity.
It’s important to keep in mind that while developing a WealthTech or a Fintech product, you don’t need to have a team composed of specialists with only financial markets background or other complex skills and deep understanding of the business. It’s your job to ensure they know basic principles and definitions and have some previous experience in the field; then, especially when skill levels are equal, they will perform at their best.
Previous experience is important and even required in a high-responsibility area like Fintech. Nevertheless, it’s not the only criterion you should count on when choosing a vendor and team. Define criteria your vendor should match to organically bolster your current development forces.
The first step in identifying the criteria is conducting an overview of the existing organization. By analyzing what you already have, you can create a blueprint for what type of organization would be a good fit for your company and solution.
To make the overview process systematic and predictable and ensure you don’t miss the point, use a project charter—a project management artifact that outlines the basics of a future project’s road map.