You Never Get 100% Control
If you don’t treat your vendor as a trusted partner
Setting aside all the complexity of a proper evaluation, the vendors that are selected to perform offshore software development deliver the best return on investment if they are treated as partners. Actually, the most successful projects we have accomplished had less control and more productive cooperation. On the contrary, the failed projects had the following symptoms of mutual distrust, strain and resulting collapse:
- Decision rights between the parties are not clear / consistent
- Customer’s business units lack a clear understanding of what we are able to deliver
- Both parties are unable to anticipate each other’s behavior. Low level of predictability
But there is a way to mitigate the risks of project failure. Just follow these five steps towards transparency and trust:
1. Invest in Pilot Projects
What could give you more information about a vendor’s processes (and more reasons to trust them) than low-risk short-term initiatives with potentially attractive service providers? Pilot projects are the stress-free way to get to know each other and have time to develop future longer-term relationships.
2. Don’t Point Fingers
While Service Level Agreements (SLA) and Service Level Specifications (SLS) record the common understanding about services, priorities, responsibilities, guarantee as well as technical specifications, they are not flexible enough to reflect the real world impact. So if the project is thrown off schedule due to, say, the bugs in third party software on the vendor’s side, it is beneficial for both sides to go beyond the contract and make everything possible to solve the problem instead of pointing to the SLA.
3. Manage Internal Expectations
Essentially, Expectation Management (EM) is about communication that is aimed at flawless and continuous exchange of information about projects, products and processes between all stakeholders.
Instead of relying on provider’s objectivity, buyers must pull all available information about the project and initiate discussions at all management levels in a timely fashion. Ensure that your employees understand why you’re outsourcing offshore and what flexibility and authority your provider has. A comprehensive EM strategy will help you to avoid erroneous assumptions about your business divisions’ needs and also manage expectations so that they remain realistic. This will contribute greatly to an atmosphere of transparency and trust.
4. Enable Dialogue
We strive to share everything that is not under intellectual property protection with our client. We expect the same behavior from the client. This way we deliver better solutions. Since we are involved in the client’s business planning process, we bring our own perspectives, ideas and knowledge to any discussion about new business opportunities and challenges. As our relationships mature, we share more risks, take greater responsibility and change our SLA metrics to include less details and more strategic thinking.
5. Develop relationship management skills
This may seem counterintuitive, but the truth is, you are competing for your vendor’s best resources and attention with the other customers. Therefore, to get the maximum value from your offshore partnership, you must treat your vendor almost like your customer. This means you should strive for open and honest communication, share you business goals and look beyond the SLAs, rather than follow the contract blindly.
In fact, pure contract-based management can be quite risky. Because if your contract happens to be a bad one, guess what? Your project fails.
The shift from contract management to relationship management allows you to be more flexible and, more importantly, helps you to develop an advantage in the marketplace, providing better results, improved service levels, and ultimately shareholder returns.
