The Development Accelerators

1. The Development Accelerators Leveraging Outsourced Expertise in Version 1.0 Product Development Ottawa Wireless Cluster Ted Burnett, VP Business Development October 14, 2004

2. Presentation Objectives • Detail a balanced value proposition - should start-ups consider outsourced 1.0 development • Define under what conditions this is advisable • How to de-risk a 3rd party relationship

3. Value Pyramid Funds Mgt Team Idea Product Outsource Partner

4. Real objectives for a start-up • Validate business plan (to your funding partners) • Real solutions to Real pain • ID Customers who will pay money for this solution • Size of market • Right plan for all contingencies • Right team for the job • Confidence in Payback • Make IP pay • Execute the plan & hit Milestones! • Focus and de-risk

5. 1.0 Development & Development Acceleration • What is it? • 1.0 Development is the creation of an initial release of a product, developed from scratch • Development Acceleration is the process to develop the product • How is it different from “normal” development? • Emphasis on gathering complete and continual requirements to create the right product • Scheduling and resourcing a complete project from inception to deployment • Much larger scope than doing feature enhancement • Higher risk of development (i.e. can it be done?) • Need to account for resources that may not be needed long-term (e.g. business and requirements analysts)

6. When to Consider an Outsource Partner Start-up will receive greatest value if: • Time to milestones/market is very important (crucial) • Development requires 2 + dev resources • Limited resources, will need to hire more staff • Development effort is not well defined • Management focus is best spent on other things • External investment is being sought

7. Concerns about Outsourcing • Exposing core competencies (IP) to outsiders • Not building a strong internal development team • Costs more than hiring own staff • No direct control over effort provided • Question of motivating 3rd party resources • Tax credit and R&D cost recovery issues

8. Addressing concerns • Exposing core competencies (IP) • IP…more than just a thought • To an individual or company • To a company with significant assets • To a partner who can mentor • Not building a strong internal team • Not a matter of “IF” but “WHEN” • Size does matter • Not growing knowledgebase • Not a matter of “IF” but “WHEN” • Extended knowledge of IP and Process

9. Addressing concerns (cont’d) • Costs more than hiring own staff • Total cost of employee (hiring,benefits,h/w,s/w,desk) • Managing the team • Time to milestones/market • Size of team on-going • No direct control • Managing the plan • Participate in the development process • Motivating 3rd party resources • Need more things in same (less) time • Contractual incentives • Tax credit and R&D cost recovery • SR&ED tax credits, IRAP funding • Documentation is key

10. De-Risking a Relationship Track Record • Consistently complete projects on-time and on-budget • Reputation for high quality products • Adherence to sound development process • Effective risk management • Accurate project tracking • Predictable project outcomes • Reliable, quality code • Rigorous testing • Accurate and detailed documentation • Has experience/expertise with financial assistance programs, i.e. SR&ED, ITC etc. • Repeat business from companies of interest

11. A Development Process • Booch • Fusion • Gamma et. al • Jacobson Formal processes such as: • ROOM • Rumbaugh • RUP • Wirfs-Brock

12. Iteration x Requirements Development Test Feature A Feature B Feature C What is Iterative Development • Features are defined, developed, and tested for each iteration Includes business modeling Includes design, implementation, unit & integration test System, load, & performance test Time

13. Parallel workflows accelerate delivery • At any point in time, three specialty teams work in parallel • As project progresses, team efficiency increases previous iteration current iteration next iteration

14. De-Risking (cont’d) • Program for start-ups: • Incubation services • Facilities and Admin support • H/W, S/W, infrastructure and Support • Technology and Architecture mentoring • Funding introductions and programs • Financial programs • Discounts • Payment deferrals • Equity for labour • IP discount • Tenancy rebates

15. De-Risking (cont’d) • Architecture focus • proper architectures ensures the long-term resilience, reusability and scalability of products • Iterative development methodology • deliver the highest-quality product in the shortest amount of time • development acceleration • Team-based projects • an entire development team or resources that complement an existing organization • Results-oriented • an accountable development team that ensures that the right system gets built as quickly and effectively as possible

16. De-Risking (cont’d) • Technology-neutral, with deep expertise • active R&D program and technology-neutral approach ensures that the correct tools/technologies are chosen for the job • Deliver results on-time and on-budget • Consistent track record of successful project completion • Reputation for producing the highest quality software • Specific experience (the tough stuff) • Building products from scratch

17. Outsourcing Advantages time delivery • Decrease time-to-market • Hit the ground running with a development team pre-made for success: no need to hire a complete development team before starting the project • Senior development staff are on-board immediately • No need to equip & house the development team • No need to hire admin & support staff • Experienced at converting vague requirements into a solid project plan • Look for a documented track record of success • An iterative development methodology ensures that the product is created as quickly and effectively as possible

18. Advantages (cont’d) • Lower risk • Trust a team that’s built this stuff before. Find a specialist in building complete solutions (i.e. the tough stuff) • Any major project is going to have a variety of unforeseen problems – you should have experts on hand who have seen these kinds of issues before and are able to turn big troubles into workable solutions • Implement business plans: look for experience in capturing loose requirements and translating them first into a workable project plan, then into a complete system • An iterative development methodology is an excellent tool for risk mitigation: you are able to prioritize (and re-prioritize) features and risks so that the product is built properly

19. partner client Advantages (cont’d) • Predictable timetables • There is a planned ramp-up and ramp-down of the partner’s development team, so there’s no need to hire full-time development resources immediately for a project • During the creation of the product, a partner can mentor and grow the client’s development team to ensure future products and features are built right. Typical project team: inception delivery

20. Advantages (cont’d) • Better ROI • A contract for services are comparable to full-time hires • There is no danger of mis-hires in attempting to build the development team • No infrastructure cost to house the development team • The development team is (typically) smaller for ongoing development after the initial release of the product. By using outsourced services, the client does not have to keep a large development staff on hand for the long-term

21. Advantages (cont’d) • You can get your cake and eat it, too • At projects end, you are left with a successful product release (on-time, and on-budget), all of the IP related to the application, the knowledge transfer built into the ramp down phase and a proper development process to follow when you move forward with this or future projects • The project is successfully completed faster, less expensively and with less risk than companies can do on their own

22. Thank You… For a copy of this presentation or further discussion, please contact tedb@bitheads.com (613) 784-7306 The Development Accelerators www.bitheads.com

23. David Cork, CEO Testimonials “bitHeads has proven to be an extremely valuable partner in not only development of applications for the NBX100, but also an asset that trained our key engineers in specific development tools.” Dan Massiello, President, 3Com Business Networks(formerly NBX Corporation) “bitHeads professionalism, flexibility and 'can-do' attitude, combined with their proven development methodology has allowed us to significantly advance our time to market. As Development Accelerators, bitHeads excels!”