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Your outsourcing procurement models are all wrong…

Software development has become commoditized. How much good this commoditization has done for businesses and providers is up for debate!  

But this phenomenon also led to the explosion of providers across the globe driving down prices as well as quality. Given these dynamics, it has become tedious and daunting to procure a provider for your outsourcing projects.

First step of procurement is identifying potential vendors that can be assessed. Here are some of the vendor identification methods that are prevalent currently:

1. You reach out to the vendor that you already had a prior relationship.
At least you know what you’re getting into with past experience. Unless your vendor has set the bar so high… you’re not open to other possibilities for you!
2. You make a vague post on LinkedIn looking for providers to respond with their portfolio.
You get inundated with hundreds of boilerplate solicitations that’s so tiring for you to assess.
3. You make a post on LinkedIn asking for recommendations from other businesses.
You rarely get recommendations from other businesses and get hit with solicitations that’s no different than #2 above.
4. You ask for referrals from the friends that might have outsourced engagements.
You are assuming that your needs and expectations are same as your friends. Each business and their needs are different, isn’t it?
5. You go on the Internet searching for outsourcing providers and their portfolios.
Not everything on the Internet is true! Speaking of nice portfolios, have you ever seen any company put out a list of their “Fails”
6. You post on freelancer sites looking for matches.
Are you looking for a moonlighter or a company that can back up their work? Of course, the freelancer site has a record of other works the vendor has done using their system… so does Craigslist!
7. You reach out to the vendors that had emailed solicitations to you earlier.
Does email receipt constitute first round of credibility?

You could see why the above methods do not result in a high-caliber vendor list to assess from! Now, when it comes to assessment, some businesses have the potential developers take a test. This could certainly help to assess the skill level of the developers. However, your contract is with the vendor, not its employees. Employees leave all the time and new hires are onboarded. If you’re recruiting an employee, it makes sense. Note that you are outsourcing as you don’t have to hire an employee… so why do you have a process as if you’re hiring an employee?

Another common theme we see is that businesses rarely disclose the functional requirements during the assessment phase. They often focus just on the coding skills and ignore the assessment of developer’s or the vendor’s ability to understand the requirements and if their coding aligns with the functional needs. It’s the vendor team’s skill levels, the training and onboarding processes they have in place, the project management practices, the team’s collaboration abilities and the delivery mechanisms – they all matter! It takes a “team” to develop and deliver software, and your software project needs a vendor that delivers as a team.

No decision maker wants to do a sub-par job with the selection of the outsource provider. Having the right pool of vendors to assess from and implementing holistic assessment criteria are the keys to success for your outsourcing engagement.

I would love competing with competent vendors for your project and hate losing to an inferior vendor that’s going to jeopardize your success. This is Sreeni Jakka (CEO and Chief Engineer of TechO2), and you can reach me at 484.252.2512 or sreeni.jakka@techo2.com.