Beware of these pitfalls when choosing outsourcing

Outsourcing Pitfall 1: Choosing the cheapest vendor

Price plays an important role in choosing outsourcing, but it should not be considered separately from other parameters. When choosing a vendor, do not pick the cheapest possible; rather, take other factors into account.

By being excessively economical, you risk losing much more money than what you have saved. When choosing a vendor look for a balance between price and quality. Otherwise you risk facing late deliveries, bad quality and technologies. Remember, if you buy cheaply, you pay dearly.

Outsourcing Pitfall 2: Not checking the references

It can happen: a vendor misses the deadline, delivers work of bad quality or just disappears and stops answering your calls. Research the market and always check the references to avoid this problem with outsourcing.

  • Ask former vendor clients for feedback.
  • Pay special attention to aspects of the previous client’s project that might be relevant to your own.
  • Customer satisfaction is important.

Outsourcing Pitfall 3: Choosing fixed price vs. time-and-materials

Fixed price is a pricing model that sets a single rate for the project, regardless of the time and expense. Time-and-materials, on the other hand, bills the customer for the hours spent on the project, as well as expenses incurred.

The pitfall of a fixed-price contract is that if underestimated a scenario that the vendor may start managing costs and cut down expenses severely, which ultimately results in poor-quality work.

Decide whether you prefer certainty and quality or the prospect of a lower bill.

Outsourcing Pitfall 4: Ignoring bad communication signals

A vendor’s relationship with their clients reveals a great deal. So beware of outsourcing communication issues. If a vendor misses your calls using time difference as an excuse and does not get back to you, this is an early signal to be aware of when starting work with him. Consider changing vendors and do not rely on time to make it better – it never does.

Outsourcing Pitfall 5: Choosing a specialized vendor

It is a common misconception that specialized vendors are perceived to be more professional. You still end up working with a developer with his expertise. As you grow bigger, you will experience a need for new technologies and you will have to attract teams from other companies. To avoid misunderstanding and controversy between the teams, it is better to choose a company that has expertise in diverse programming languages and frameworks.

Outsourcing Pitfall 6: Going for big brands

A growing number of outsourced projects has prompted huge outsourcing companies to work as “conveyors” on standardizing all processes. Therefore, it is common that insufficient attention is paid to the specific clients’ features.

A big company will not make concessions to a small customer and will more likely just skip him. This results in a drastic decrease in quality of the work delivered. Therefore, it is necessary to choose an outsourcing company that can offer a personal approach to your issue.

Pay attention to medium-size companies with good references and reputation. As an extra benefit you will have access to a decision-maker that will help you to ease your work.

A personal approach to each customer ensures the possibility of implementing unique high-tech product features that result in outstanding product quality, along with total end-user satisfaction.

Outsourcing Pitfall 7: Going for freelancers

Since freelancers work individually, they face problems troubleshooting complex issues while programming because there is no one else nearby to help them. Freelancers are seldom prepared to take up even a medium-sized project – they can only take up projects which they can handle single-handedly within their individual capacity. In the worst-case scenarios, freelancers may just disappear in the middle of the project. Working with a R&D company with a decent pool of software professionals will help you avoid this pitfall.

About the Author
As a CEO at Eastern Peak, a strategy and technology consulting and development company, I ensure top quality and cost-effective services to our clients from all over the world. I am a founder and technology evangelist at Ubertesters, Ubertesters is the best of class mobile testing platform and crowd-sourced beta testing solution ensuring flawless application development for our customers around the world. I am a founder and adviser at Maximum Education. We develop Maximum Education as an innovative education and technology company, delivering educational services and products to our students and partners in Russian Federation and throughout the world. Previously, as a CEO of the GetTaxi (Gett) technology company, I was in charge of developing the revolutionary GetTaxi (Gett) service from ground up and deploying the operation across the globe from London to Moscow and Tel Aviv. Graduated with an MBA from the Wharton School, the University of Pennsylvania, double majoring in Finance and Entrepreneurial Management . B.Sc in Computer Sciences from the Ben-Gurion University.
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