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Apr 02, 2015

How to be disappointed with tech-outsourcing (part I)

Author: Alexandra Stanculescu

With 15 years background as an outsourcer of dedicated software-specialists, we’ve heard a lot of related stories. Some of them come from our partners; most of them are tales of clients’ previous experiences. An alarming number of these adventures make the idea of outsourcing feel similar to bringing a time-bomb into the office headquarters. Over the years, however, we’ve managed to develop an Outsourcing Wall of Shame, to act as guideline. It is insight we keenly share whenever we get the chance, in the hope of helping to shed a bit of light on some of the industry’s most common antagonists.

An outsourcing project’s most common enemies

A most persistent obstacle we’ve encountered has many faces, but only one name: mindset. Many companies initiate an outsourcing partnership much like most foreigners approach authentic Chinese cuisine while travelling on vacation: based on rumors, without any real, documented notion of what the experience is going to be like. After hearing some one-sided stories, they find out outsourcing can help reduce costs.

Who’d say No to that? So they set out with only one goal in mind: cut down on expenses. Naturally, this means they’ll be selecting their vendor based on this criteria alone, ignoring everything and anything else. Basically, they just go for the cheapest provider their immediate business network or search engine can suggest. Now let’s assume, for the sake of the argument, that this outsourcing company with low fees is outstanding at performing their job. But their job isn’t to cut down their contractor’s costs – though that might be a significant side-effect. Their job is to deliver proficient software development teams. If their contractor has only one thing and that thing alone in mind, the overall collaboration will, as a result, lack vision. Instead of focusing on what is supposed to be delivered and on the overall advantages of outsourcing to a specialized provider (like better product quality, improved time-to-market, etc.), the company becomes obsessed with the numbers and misses out on otherwise significant benefits.

Another consequence of this misguided mindset is cultural and/or communication barriers turning up along the way. Because the sole basis for selecting the vendor had been cost, compatibility never even comes into play until it starts causing problems. By the time it does, the contract is usually signed and they begin to realize that differences are beginning to cause delays. Delays they are, of course, paying for. Language issues become a bit more of a handful than had been anticipated. Working methodologies differ so much one feels completely off-world to the other. This obviously results in a highly inefficient collaboration that leaves both parties with a feeling of resentment and nothing to show for.

In spite of all this, an outsourcing project’s most deadly enemy probably remains the lack of coordination system. In other words, outsourcing what you can’t manage, while trying to manage it anyway, many times without having any basis for measuring results. This leads to complications like unrealistic expectations, lack of key performance indicators or ambiguous/inexistent service level agreement.

Want to know more about how to meet an outsourcing collaboration with the right mindset? Read about it in our dedicated article, and subscribe to our feed so you don’t miss out on the story of our own outsourcing set-backs, as we talk about a tech-outsourcing provider’s experience with nearshoring non-core functions.

Until next time, I’d be glad to hear your own first-hand or word-of-mouth stories, so share them with us through comment or email!

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