Is It Time to Switch Your Outsourcing Vendor?
Is It Time to Switch Your Outsourcing Vendor?
Feb 17, 2016 |
As software development outsourcing continues to be an integral part of how we do business today, the decision to change outsourcing vendors, before or after the termination of a contract, has become a foreseeable reality for many. Worldwide, companies are eager to get on board with new outsourcing agreements, hoping to gain the advantages of better quality and greater innovation at a lower cost.
However, many companies want to avoid the frustrating process of finding a new outsourcing partner, and become hesitant to switch even if they are having issues of cost, performance quality, or cultural fit.
Look for these four things to know when it’s time to consider switching to a different outsourcing partner.
Service and/ or Communication Issues Perhaps your chosen outsourcing partner doesn’t live up to the agreed upon requirements. Problems can come about when customers and their outsourcing partners are not entirely prepared to work together after the contracts have been signed. When this happens, services may never be delivered, operational activities can get halted, client and vendor staff are both frustrated and the schedule for accomplishments is delayed. This can occur for multiple reasons such as:
Expectations are not set before the contract is signed
Service agreements laid out in the contract are not met by the vendor
The vendor does deliver on service agreements, but the client notices less value than hoped for
The company culture is not focused on their clients
Vendor Streamlining In addition to dissatisfaction with performance, another reason you may consider replacing your outsourcing partner is to avoid risk. Outsourcing clients often spread their workload between several vendors, which causes some clients to experience a decrease in purchasing power. In this case, you could reduce your number of outsourcing partners in order to consolidate and enhance your bargaining power. This may require transitioning specific outsourced roles from one outsourcing partner to another.
Outlook Changes Maybe you are looking for a vendor that is able to offer you a better value. You may feel like you have matured past your present vendor and so you’re searching for one that will give you a better competitive advantage. In addition, you might have realized that your regional outsourcing partner isn’t able to service your global needs. If you decide to change Accelerance can help by evaluating the multitude of international outsourcing vendors for you and matching you to the outsourcing vendor that best fits your company’s culture and business needs. Best of all it's free to you!
Vendor Market Fluctuations Companies often look for new outsourcing partners when changes in the market such as fluctuations in exchange rates or other economic conditions cause the originally selected firm to raise rates. Also the availability of new or specialized firms for new technologies can occur. Once an outsourcing contract is underway, organizations recognize that the outsourcing marketplace has grown so much that there are many more options now that can assist them to build a competitive lead.
If you’ve experienced any of these above, it may be time to consider switching outsourcing partners. However, you need to be aware of the risks that may affect the process of transitioning to a new outsourcing partner. Whether you decide mid-contract or post-termination, it’s important to weigh the all of the risks involved in switching partners to ensure the smoothest transitioning process. Understanding the factors contributing to a successful changeover is vitally important.
Here at Accelerance our clients have learned that a successful vendor relationship requires more than just technical skills. It is our communication skills and dedication to customer satisfaction coupled with our outsourcing experience that has fueled our success. We have a global view of the market and are able to assist organizations in finding the most cost efficient and effective vendor for their specific needs, so contact us to get started!
As CEO, Andy leads and advocates for the globalization and collaboration of great software teams with companies in search of talent, innovation and a globally-distributed extension of their engineering function and culture. Andy founded the ground-breaking nearshore software development services company, Isthmus Costa Rica. He began his global software services career as a division manager at Cognizant during their early formative years.
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