Software Outsourcing Hacks (1/7) - Going High or Low?
Srivatsan Aravamudan Nemili / Apr 21, 2017
Welcome to yet another series in PsiberTech Blog. This is the first of seven blog posts in which we would be discussing useful hacks pertaining to software development outsourcing.
More than 50% of software outsourcing has failed to deliver the expected results.
Many firms have turned to software development outsourcing in the past few years instead of using in house development team. The trend continues to raise even though many studies suggest that more than 50% of software outsourcing has failed to deliver the expected results. There are various reasons pertaining to this raise. Research has suggested that IT outsourcing can provide firms with economic, technological, and strategic benefits, such as reducing IT operation costs, improving technical competence, and even providing firms with competitive advantages over its competitors.
All things said and done, software outsourcing is no cake walk. In fact, both companies and vendors suffer throughout the process due to poor practices in vendor selection, scoping, budgeting etc. In this series, we would list down hacks, which if proactively handled can benefit outsourcing projects.
The Technology Consultant who would be the captain and crew of your outsourcing ship, forms the crucial element of Software outsourcing.
One of the main cause of failure in outsourcing comes from poor management practices starting with choice of vendor. Vendor selection i.e. the Technology Consultant who would be the captain and crew of your outsourcing ship, forms the crucial element of your outsourcing.
Go Low or High?
Often the choice of vendors would come down to cost estimation each has provided. While many opine choosing the lowest bidder, I strongly suggest you stay away from them. If it is too good to be true, it probably is. Perhaps the vendor has not fully understood the effort needs required for the project. Or perhaps his costing model has not prioritized the features you wanted in the software application.
Highest bidders on the other hand may promise you the highest quality of services. While it seems, there is a relation between cost and quality, I often found that the average bidders tend to deliver at high quality as well. Hence, paying higher price for quality would be a unwise decision.
Furthermore, it is important to look at the deliverables and cost break down provided by each vendor instead of choosing them on cost alone. Asking few questions to clarify vendor’s effort would bring more light into their approach towards the project and would enable you to make an affirmed decision.
Stay tuned for more posts on this series. Thanks for dropping by and Have a fantastic weekend!
Business Analyst - Snr Software Consultant.