outsourcing problems
Outsourcing Problems and Mistakes that can be avoided:
1. The scope and schedule of the project was not clearly defined.
Any successful outsourcing should always start with a clear statement of what needs to be accomplished. Failing to do that is one of the biggest mistakes.
Define your project requirements up front to avoid outsourcing problems in a future when time to accept project comes. Provide your offshore partner with accurate, complete information and ask them to quote you appropriately.
2. Perform complete review of your offshore service provider
Typically this activity is performed by all companies that outsource their projects offshore. And still failing to execute it properly is the reason # 2 in the list of Outsourcing Problems.
When you're evaluating proposals from service providers, please ask as many questions as you can. While checking references is helpful it really doesn't provide you any guarantee that your outsourcing project will not become a problem later. One of the most important questions you ned to asnwer is if your future vendor has the "right attitude" to your company as a client.
3. Avoid outsourcing to company without specific experience
Before I started working at SolovatSoft I worked as Software Project manager in an internet company. One of my responsibilities was to send out RFPs and evaluate vendors. What I noticed was that 90% vendors were in hurry to sign contract even if they really didn't know what our company needed. Failing to evaluate your vendor domain expertise leads to the biggest outsourcing problem also. This is especially critical when you are outsourcing a complex system design and development.
4. Selecting vendor based solely on price is another big outsourcing problem.
Most of the most successful projects are the ones where vendor has a balance of price and and quality.
5. Starting Outsourcing from small project is another good approach to avoid problems.
When you work for the first time with unknown vendor, it's always a good idea to check them on a small work.
6. Make payments based on achieved milestones.
As an experience offshore outsourcing service provider we always ask no more than 15-25% payment up front. The other payments really depends on the milestones but we always leave another 15-30% to be paid once the project is completed and released to production. The properly formed payment schedule enforces your vendor to achieve the required milestones with acceptable quality and avoiding one of the biggest outsourcing problems.
7. Include post release product support in your contract
It's much easer to get better support tersm before awarding your project to a vendor, rather than negotiate it after completion of the product. Most honest vendors can provide you with some free support time once the project is completed.
8. Write everything down
After implementing more than 200 projects I learnt the rule number #1 in voiding outsourcing problems - write everything down. Never trust any verbal agreements or emails. Make sure that you have clearly defined schedule, scope of the project or payment schedule and request a writen confirmation from your vendor.