Skip to content
Talk To Us
August 9, 2023

The Cost of Choosing Wrong: Calculating the True Price of an Unreliable Service Provider

Many years ago, I was surprised to receive a late-night phone call from a colleague working for a company I was providing advice to.

“I’ve just had to pull over twice to throw up,” he told me.

He’d just realized the software project he was responsible for was off the rails and beyond recovery with the team at his disposal. Delivery dates would be missed, applications wouldn’t ship, and there would be additional costs to backtrack and sort the mess out.

In a shaky voice, standing there on the side of the road, he asked for my help. I spent several months subsequently working with him and his organization to get things back on track. It’s an awful feeling for any manager to face the fact that a project is heading for disaster. But it’s an all too common occurrence.

The Consortium for Information & Software Quality put the cost of unsuccessful development projects at US $260 billion in 2020 alone. The cost to the US economy resulting from projects gone wrong, as well as operational software failures and poor quality in legacy systems, was estimated to be an eye-watering $2.08 trillion that year.



The Opportunity Cost

The real cost is actually much higher. While you might have to write off the costs of development and bear additional costs associated with a new, reliable service provider taking over a failing project, there’s also a significant opportunity cost associated with poor-quality software.

It’s the competitive advantage, not to mention the revenue you forego from having to delay launching a product or service. Even more damaging is shipping software that isn’t fit for purpose. It could be the reason why purchases are abandoned in your store’s online shopping cart mid-transaction. It may be why customers cancel your app subscription after a couple of months.

There are a multitude of reasons why software projects with outsourcing partners go wrong. But when you look back over your shoulder trying to figure out what happened, it's likely you’ll find the seeds of destruction were planted right back at the very genesis of the project.

It could be that you weren’t thorough enough in the design process or didn’t demand high enough standards from your software partner from the very start.

It could be that you were dealing with a substandard partner.

A reliable service provider will give you input early on, offering feedback on the project design and timeline.

Beware of any partner that simply nods and says they’ll make it work - as long as the price is right.

Usually, you will end up paying the cost of having the wrong people on the team or not having the right people on the team. They are different things.

A team of substandard software developers will increase the project's chance of failure or could see you ship poor-quality software. On the other hand, a quality team that lacks key crucial members could be as equally troublesome. You may have great front-end developers on the job, but your partner is unable to find a suitable software architect.

Beware of any partner that needs to go out and hire a whole new team to complete your project.


Get Out Quickly

When you find yourself thinking that a software project is heading in the wrong direction, get a second opinion, and if necessary, get out of it sooner rather than later. The cost of switching out a development team is substantial because there's a big learning curve for a new reliable service provider. There could be production support issues, and the previous team may have saddled you with a truckload of technical debt.

You need a reliable service provider with a good ‘walk in and take over’ methodology who can help you get back on track as quickly and efficiently as possible. Thankfully, we have plenty of reliable service providers up to that task in the Accelerance Global Network. 

But the real answer is to work with high-quality and reliable service providers from the outset. It’s about doing your due diligence on their capabilities and track record and working with your chosen partner to set the project up for success. It’s about agreeing, setting measurable milestones, and addressing issues before they overwhelm the project. 


Avoid the stress my former colleague went through all those years ago. Download the Accelerance guide Due Diligence In A Disrupted World to help you choose the right partner and avoid wearing the costs of an outsourcing disaster.


Rich Wanden

As Chief Customer Success Officer, Rich oversees Accelerance marketing and sales operations globally with a focus on helping customers make the best decisions for choosing a software development team and working together. Prior to joining Accelerance, Rich has worked in management consulting, IT advisory and...

Recently Published Articles

View All Posts