Why You Still Get Burned by Outsourcing & How to Fix It Now

12.14.16 By Matthew Stoltz

Outsourcing!

Whether your first thought is, “yeah, let’s do this!” or more like, “ugh, fine,” chances are that, if you've outsourced IT, you’ve been burned with a do-over, hidden cost, or delay.

 

Does this sound familiar?

"We've been hit with so many project hiccups over the years that we've gotten used to poor service."

You have the vision. You understand that a custom mobile app will help your sales team reach 28% more prospects, or that replacing a tech vendor can help you reduce IT ticket volumes by 42%.  

You've become too invested to get hit with a delay and then be charged for it. 

 

It gets worse. 

Tech outsourcing essentially hasn’t changed for a decade (with the exception of a select few vendors).

Don’t believe me?

An article published by Forbes last September explains why tech projects fail:

  • Poorly defined (or no defined) outcome
  • Lack of leadership and accountability
  • Insufficient communication
  • No plan or timeline
  • Lack of user testing, or failure to address feedback
  • Solving the wrong problem

You’ll notice the many communication and project management issues.

Another article by Tech Republic titled, “Avoid these common causes for project failure,” describes many of the same issues, but was published in 2005

It’s been a decade, and the problems are right there in front of us. Why do they still occur?

 

It has to do with how you find and vet tech partners.

I’m going to make a wild prediction; when it comes to outsourcing, you think about cost first and location second.

Most people do. Lower costs help your margins, if the job’s done right. If it’s not done right, kiss those margins goodbye. Vetting IT vendors based only on cost and location opens the door to reckless vetting offshore.

 

That’s where you get burned.

Offshore vendors are notorious for being culturally distant, and lack creative thinking, problem-solving, and project management disciplines that tend to come in handy if you want to be, you know, successful. Project management hasn’t changed because the culture of the countries we source tech from hasn’t changed.

But you also can’t simply throw cost out the window. So now what?

Fear not! While you might not be able to change an entire country’s culture, you can rethink how to source the ideal tech partner while considering cost – using only one word.

 

-effective.

Cost-effective.

 

A cost-effective approach adds quality and accountability to the equation. You are well on the journey to rethink IT with balance. And as a wise Jedi once pointed out, balance is good (or was that Victor Hugo?).

Now that you know the approach, let's do something about it.

 

Who’s really handling your project?

 

Years of painstaking offshoring has taught the IT community that cheap doesn’t necessarily help the business. Here are three ways to vet with a cost-effective mindset:

 

1. Ask questions about the vendor (beyond their location and cost).

A strong vetting process requires proof of work, putting you in the driver’s seat. Lead with questions about project management and accountability, saving cost for last.

  • Can they show me examples of past work?
  • What do their customers think about them?
  • Will they understand what I want, or just say ‘yes’ to everything?
  • Have they sat in my position before?
  • How will they ensure the project is completed on time, as expected?
  • Where are they located, and how will that effect the project?
  • If the vendor is in the US, will they outsource any or all of the project and where to?
  • Lastly, ask about cost and how they plan to be accountable for any project missteps

 

2. Pick up the phone & get past the sales gate

Most mid-sized IT vendors do not have a huge call center for you to get lost in the shuffle of prospects. Use that to your advantage. Look up 3-4 midsized IT companies in your region. There’s a strong possibility you will get a senior executive on the phone sooner than you would at a larger, global firm.

Once you're in the door, ask for a meeting with the team you'd be working with. Your interactions with sales will end after the project begins.

Get to know the people you plan to work with daily, and get technical.

 

3. Extend your search beyond the biggest companies

Big companies prefer to serve big customers. Unless there’s a resounding “Fortune #” in front of your name, as a new prospect, you’ll likely be paired with a junior executive so they can cut their teeth.

 

That, combined with the promise of a “global team” model means that they will essentially repackage your project to make it sound like their top people are handling it, but toss it offshore, charging you a higher price.

 

Find a partner who will dedicate the kind of expertise you’d want from an advocate, who can tell you ‘no’ at times (because honesty might just save your project), and has the backing of a strong team and a track record of stewardship. Do you want somebody to simply do the tech work, or do you need an advisor?

 

By leading with “who” questions, you get a grasp of how the vendor operates.

When you frame your vetting process to embrace location and project discipline, you broaden your chances of finding the optimal cost-effective partner.

 

 

Outsourcing: Balancing Location, Quality, and Cost

 

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