Throughout my career I’ve come across many people who don’t fully understand the differences between a software consulting environment and a product development one. If you’re someone that has only every worked in one of these two environments, you might just be one of those people.

In essence; product development focuses on a single software product to be developed. Even if the company has a complete portfolio of different products, most engineers will spend their time on a single product for an extended period of time. Conversely, consulting businesses have smaller projects and typically do not develop software products, but rather customise existing large products and/or develop small customised applications specific to a single customer’s requirements.

1. Product Development (Software Engineering): traditionally software was regarded as any other engineering endeavour: we create a product, we sell as many units of it as we possibly can and make lots of money. Microsoft is a great example and the original company to have implemented a product development approach.
   1. Disadvantages (of Product Development)
      1. Funding: The more time you spend in R&D developing the product the more value you will add thereby the higher the chances are that you will be able to actually sell it and the higher the price that you can sell it at. However, with each day that you spend in R&D the more money and time you need to invest while holding off on sales and profits until you have a finished product. Depending on the complexity of the product and value/features you’re creating, this R&D phase can last anywhere from a few months to a a few years. Simply put: you’ll need deep pockets.
      2. Risk: once again, with each day that you spend on R&D the higher the risk that you’re working on features that nobody wants, meaning that you will be wasting your time and money. Taking on such an endeavour is almost impossible if you’re starting from scratch, and thus most small entrepreneurs  look for investors in exchange for a slice of the pie i.e. a percentage of the company. In order to get an investor, you will need a really good idea for a product as well as a exceptional business plan for proving an ROI (Return On Investment) for the investor.
   2. Advantages (of Product Development)
      1. Focus: narrowing the scope of work in a product development environment allows the engineers to be a lot more focused. Instead of worrying about hours being billed, multitasking between projects, dealing with politics etc. they can focus on the task at hand which is to create technical solutions.
      2. High quality software produced: product development companies know that customers purchase their software products for no other reason than for the software itself and the features it provides. Therefore in order for such a company to survive it needs to provide finished software products that are of the highest quality and offer the largest amount of features.
2. Software Consulting: a consulting business charges for services rendered, meaning that you’re not selling software but rather your time, skills and effort. The consulting business is very much like prostitution: a salesperson (pimp) sells the services of software developers (prostitutes) to customers and theses services are billed by the hour.
   1. Disadvantages (of Software Consulting):
      1. Limited time: with there being only 24 hours in the day, the amount of money you can make will always be capped. If you stop working, you stop making money.
      2. Unpredictable cash flow: business opportunities present themselves randomly in this line of work. You may have a period where you are presented with several projects at the same time, while there may be periods of drought where you and other consultants are sitting twiddling your thumbs.
      3. Unpredictable work schedules i.e. multitasking chaos: working schedules are difficult to follow when you have customers randomly calling you for support or new projects. Due to the fact that big money can never be made due to time constraints, you cannot always just reject an offer for a new project if you don’t have any people available at the time. Due to unpredictable cash flow, it is difficult to hire dedicated staff to specialise in and handle only support calls i.e. if a consultant is going through a drought he can easily handle a support call therefore no need for support staff, but when that same consultant is doing 3 projects simultaneously the support call becomes a nuisance and a distraction.
      4. Limited energy: due to constant time constraints, consulting is a fast paced environment. People can only keep up with the pace for so long before they start running out of steam.
      5. Politics: due to the fact that consultants deal with a lot of people on a day-to-day basis, it is inevitable that there will be politics. Although it is advised to not get involved in the politics, that is not always possible when it affects the projects.
      6. High staff turn over: most employees want consistency and peace in their life. The above working conditions of a consulting business make for a very stressful environment that interferes with the well being of consultants and their families. Furthermore, an unpredictable cash flow often forces such businesses into retrenching employees or making them contractors i.e. “we’ll call you when we need you”.
      7. Limited quality of software produced: due to the chaos and time constraints involved in a consulting business, the software development lifecycle is often rushed especially when consultants are working on several projects at the same time. The quality of the software being produced is also directly proportional to the size of the budget, which is  typically set by bean counters and thus the software will only ever be as good as it needs to be.
      8. Limited QA (Quality Assurance): doing anything related to quality assurance is often side-steppepd, such as code reviews, unit testing, lab testing, UAT (User Acceptance Testing) etc. This further contributes to the often low quality software being produced by consultants.
      9. Limited documentation: specification documents and documentation in general is often treated as an after thought … if it’s even thought about at all. For this reason, the customer’s requirements are often misunderstood or lost in translation between the business people and technical consultants i.e. in translating functional requirements to technical requirements.
      10. Limited talent in the market: many people are aware of the all the above working conditions that make a consulting business an environment filled with chaos and stress. Highly talented software developers are often afforded the luxury of choosing between working for large and wealthy companies vs small consulting companies. Such highly talented people that have purely technical motivations will often chose to do product development as opposed to working in a chaotic environment. Having said that, there are may advantages to working in a consulting business.
   2. Advantages (of Software Consulting):
      1. Never a dull moment: due to the multitude of projects that a consultant will be involved in throughout their career, it leaves little space for boredom. Of course there may be some projects that are less interesting than others, but working with various kinds of people in various projects keeps things interesting if you’re the kind of person that craves stimulation.
      2. Improved social skills: the stereotypical antisocial IT nerds are rare in the consulting business and if they do exist they struggle to deal with or cope with the constant communication with customers. Software consultants don’t spend all day, every day sitting in front of their computers coding like product development engineers. The constant communication improves their social skills, which are pretty good skills to have in life, considering that this world is filled with people which are tougher to get along with than machines. These social skills can be used later in life to move into other roles e.g. analyst, projects manager, sales executive etc.
      3. Knowledge of various other industries: engineers in a product development environments live in sheltered cocoons not really knowing or being interested in other industries. Consultants on the other hand typically do projects for all kinds of industries e.g. banking, investing, logistics, warehousing, accounting, social networking, marketing, security, conservation etc. Consultants are are this forced into having to learn and understand each industry that they are consulting for. Over the years, this allows them  to accumulate a broader amount of general knowledge as opposed to purely technical skills.
      4. Financially significant to the company: in a product development environment the sales people are the ones in the frontline bringing in the money, while the engineers are treated as kids that are thrown into a dark room, given toys to play with and expected to do the “technical stuff” and innovate, while the sales people are sipping cocktails and playing golf with their customers/managers. Consultants on the other hand are directly dealing with customers and billing hours, which puts them in the frontline keeping the cogs turning.
      5. Glory: based on the fact that consultants deal directly with customers, they are often regarded as technical “gurus’ or “IT geniuses”. Of course this is a fallacy, but nevertheless technical people are treated with a lot more respect by managers and customers.
      6. A single person can often develop the software from beginning to end: due the relatively small size of the projects in consulting environments, the software can often be developed by a single consultant without having to collaborate with other developers/colleagues. Strictly speaking, the only collaboration typically needed is between the consultant the customer/manager to determine business requirements, timelines and budget. This often makes things easier and speeds up the development process. Lastly, it makes the developer a lot more fulfilled knowing that each piece of software they develop is their baby.
      7. Autonomy : consulting involves a lot of travelling and irregular work schedules. Therefore, generally speaking it is not the kind of job where one will constantly have a manager looking over their shoulder. This of course gives consultants a certain amount of freedom and autonomy. However, keep in mind that this freedom comes with responsibility i.e. consultants need to be self motivated and disciplined.