It will come as no surprise when we say that producing an IT solution is a multi-step process that requires the right implementation approach to achieve the best results. Also crucial in the production of an IT solution is the division of the software development process into smaller, parallel or sequential steps or sub-processes, streamlining the management of the various stages of production. In our work over the years, we have verified which approach yields better results when implementing factoring software, and makes it best when the vendor works closely with the client team involved in the process.
Join us for a two-part series of posts about the two most popular approaches – Waterfall and Agile – which we look at from a factoring system perspective.
Which approach works better in factoring implementations, and what are the benefits for banks and factoring companies?
It's worth noting here that each of these methodologies offers unique approaches and their benefits and limitations for clients.
Cascading project stages – Waterfall methodology
Waterfall is characterized by a linear, sequential approach to project management. This approach divides the software development process into distinct phases, where each phase must be completed before moving on to the next.
We can distinguish the following phases:
- Requirements – gathering all project requirements, creating documentation of the solution specification.
- Design – creation of the software design, which includes the interface, architecture and system specification, among other things.
- Development – producing the software from start to finish.
- Verification – testing the solution produced in its entirety and verifying that the requirements have been met.
- Implementation and Maintenance – installing the created system, e.g. in the client's infrastructure, and then maintaining, i.e. monitoring for functionality and performance.
What are the advantages of the Waterfall methodology, when applying it to the production of a factoring system?
One of the main advantages of the waterfall methodology is its predictability. The process is well-defined from the beginning, and each phase must be completed before moving on to the next phase.
With this approach, we also know the scope of the project from the beginning (we establish it in one of the initial phases). As a result, we are able to plan the budget more accurately and allocate the necessary resources needed for its implementation.
What limitations do we need to prepare for?
The biggest disadvantage of this approach is that it can be difficult and costly to make any changes (e.g., new functionality, the way a module works, but also the look of, for example, the system for the end customer) after the completion of a particular phase of the project. It requires starting some phases of the project from scratch basically, with the changes made – and this requires time and additional, previously unplanned resources.
Taking a phased approach also means that with such manufactured system, there is no room for rapid response, for example to a changing environment, such as market preferences or regulations.
This kind of flexibility and openness is crucial when developing software for factoring companies or other financial institutions. If we take into account the constant technological advances and changes that financial institutions, among others, have to deal with on a daily basis, this methodology can prove to be much more costly.
Thus, the Waterfall approach will work well for solutions whose shape is clearly planned, and during development we do not assume dynamic changes and dependence on, for example, external factors determining the business attractiveness of the solution.
The second approach, placed in opposition to the cascading Waterfall approach, is the Agile methodology. You will read about it in the next post HERE.