Internal Project Intro
As part of my series on simple business metrics, here is an elaboration on metric #4 – External vs Internal Projects. What are those? As I (and most people) define them, external projects are paying projects for other people and internal projects are projects that help you land external projects (like a marketing campaign or software upgrade). Please note, internal projects do not include routine tasks like accounting or business development.
Internal Projects – The list
That being said – here a non-definitive list of what I consider to be worthwhile internal projects for a web development firm
- Short- term custom software – anything that speeds up data entry for example
- An Intanet (for your people)
- An Extranet (for your clients)
- Your website
- SEO campaigns
- Marketing honeypot sites that can be used for publicity – like eNormicon was for 37 Signals.
- Projects that allow you to learn and explore a new technology at your own pace – that was how I learned ASP.net MVC 3 and Silverlight.
- Explicit learning of new technologies and techniques.
- Short- term collaborations with other firms that allow some “code bonding”
- Prestige projects that you do for free to meet people – sites for symphonies or influential charities woudl fall in this category.
- Genuine pro bono work for kind hearted reasons – it sharpens your skills and you feel good at the same time.
- A hobby
- A vested interest – there will be internal constituencies both for and against it (nobody likes change)
- Difficult to modify in your workflow
- An entitlement to clients or the public if they’ve become used to it
- Psychologically difficult to remove – it’s like giving a way a puppy you’ve had for six months
And now for the big question – how much time should you spend on internal projects?
In my experience, you reach the point of diminishing returns if you spend more than 30% of your time on internal projects. 30% is just a general rule I have arrived at over many years in the business. Your mileage may vary.
Why measure the time you spend on internal projects?
Internal projects are way more fun than external projects. No one to tell you to make the logo bigger, no exact specification to match, no conference calls, no rush deadlines – just a lot of doing what got you into the industry in the first place. You get to do things YOUR WAY.
I’ve found that the internal work can come in the way of paying work in some circumstances, and (unless precautions are taken) it gets in the way of unpleasant but necessary routine work in most circumstances. Isn’t working on the SEO campaign more fun than doing accounting? Isn’t coding up that new app for the animal rescue more fun than prospecting new business? It’s way more fun, and you deserve the fun, but just keep it to 30% of your total work. If you measure your time via some sort of time tracking service, and then analyze your time – you can see the true cost of that new app.
Editor’s Note
This blog post originally appeared on the Profit Awareness Blog – as that app is up for sale, it has been consolidated into the main Digital Tool Factory blog.
