Avoiding the Top 9 Software Outsourcing Mistakes

December 12, 2012

By Steve Mezak

Avoiding_the_Top_9_Software_Outsourcing_MistakesIt might not be rocket surgery – but choosing the right software outsourcing partner isn’t easy.

Take the case of Jeff Shules (name changed to protect the unfortunate): when I met Jeff, he was a VP of Engineering who had spent five painstaking months (at about $15K per month – his salary at the time) accomplishing nine site visits in three countries, to select an offshore outsourcing vendor.

He investigated India, China and South America, seemingly leaving no stone unturned. Ultimately, he selected a U.S.-owned outsourcing vendor with an operation in China. This vendor was in the process of acquiring a second team of programmers who were perfect for Jeff’s needs.

The Deal Was Closed – and Then the Problems Began

When the vendor’s acquisition of the second Chinese team fell through, a junior team from another operation was assigned to Jeff’s project. The junior programmers’ English skills were limited, making communication difficult and inefficient. Their programming skills were worse. Their day-to-day activities had to be closely monitored, with the source code reviewed daily. Because of the 16-hour time difference with China, managers in the U.S. spent many late nights emailing detailed instructions (even pseudo code) and answering questions by phone when it was daytime in China.

As you may imagine, severe morale problems emerged in the U.S. staff, made worse by the fact that they didn’t believe outsourcing was a good idea to begin with. Missed deadlines and extreme employee frustration eventually elevated the issue to the board level. Executives from the American office of the outsourcing vendor “parachuted” in to help fix the problems.

Finally, after a long six-month learning curve, the Chinese team became more efficient. But the damage was already done. Despite Jeff’s careful research and painstaking attention to detail, he had made a critical outsourcing mistake and found himself resigning from the company.

Reap The Benefits of Outsourcing While Avoiding Disaster

There are tremendous advantages to outsourcing, but choosing the wrong vendor can cause serious problems that can stress or even cripple your company. How can you reap the advantages of outsourcing – the competitive advantage and acceleration of your time-to-market, the quality product and reduction of costs – while avoiding a disaster like Jeff’s?

First off, you should avoid the nine biggest software outsourcing mistakes. These include:

1. Hiring a team that told you they were solely dedicated to your project, only to find out they’ve over-extended themselves to multiple clients.

2. Hiring a “body shop”: a vendor that charges you for a room full of programmers without “adult supervision.” In this situation, you end up managing and directing them yourself.

3. Putting off developing and communicating IP protection policies and procedures until it’s too late, thereby jeopardizing your trade secrets.

4. Failing to provide adequate specs, resulting in unusable software.

5. Neglecting to choose a team with a full-time, English-speaking liaison who can communicate effectively with you and the outsourced team.

6. Choosing a vendor with a great price and solid skills but with too many cultural barriers to be able to deliver a proper user interface.

7. Finding the “perfect” team, only to discover that they regularly lose engineers because of high attrition rates, dramatically delaying the completion of your project.

8. Having to work long, odd hours because you’ve chosen a vendor whose time zone directly conflicts with your preferred working hours.

9. Failing to use a bug tracking system to keep track of defects, issues and enhancement requests.

Perhaps this list seems basic to you – even elementary. Perhaps you’re as thorough, cautious and intelligent as they come. The fact remains that time is required to conduct a rigorous evaluation, and even when this is done, as Jeff learned, miscalculations are still extremely easy to make.

To judge quickly and well requires experience. It requires not simply visiting a site and asking questions, but asking the right questions. It requires a thorough acquaintance with a vendor, from its strengths and weaknesses, to the history of its dealings with other clients in all facets.

When a client comes to us, we can quickly turn to our network of partners, each of whom has been pre-qualified and deeply assessed. These are companies we know well. We can recommend them with confidence. Our process reduces an endeavor of months down to days, and turns a gamble into a sure-thing. Working with one of our partner companies frees you, the client, to focus on what’s most important: getting your project completed.


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