You’re outsourcing for the wrong reason.
Would you resource your internal development team based purely on hiring the cheapest candidates you could find? Of course not! So why do so many organisations place so much emphasis on a hourly rate when selecting a development partner?
Having worked previously with outsourced teams, the experience was often hit and miss and the results rarely matched expectations. Despite plenty of hard work and technical expertise, there remained ineffective communication and a lack of quality. This, coupled with bureaucratic red tape imposed by management, collectively undid the team’s good work.
My experience is that team quality is highly variable, often due to staff turnover; and it is the luck of the draw who is deployed to your project. Whilst the benefits of an effective client-side project manager with tightly defined requirements are clear, these can often be negated through additional cost and bureaucracy. Furthermore, an Agile software development approach is out of the question if you seek to retain any semblance of control.
Having spoken with a number of organisations that have had similar experiences and outcomes, I can confidently state: you’re doing outsourcing for all the wrong reasons.
Most organisations consider outsourcing development because at face value, it is an appealing cost savings measure. Despite their best intentions, by focusing on the cheapest option, companies sacrifice quality which significantly impacts their outcomes.
In an ideal world, every business would have a team of highly skilled software engineers on the payroll. The reality is these technical experts are valuable, scarce resources — challenging to recruit and retain and the elite are extremely expensive (and rightly so).
It’s not difficult to see the appeal of a budget outsourcing development partner. You get resources you need immediately, they’re significantly cheaper than hiring locally and you help the CFO improve the bottom-line. Everyone’s a winner…right?
We know it rarely works like this. You end up compromising speed and quality and these always have a hidden price-tag that is hard to fully understand if you are only looking at hourly rates and not the quality and accuracy of work on the first pass.
I believe IT Procurement and Vendor Management are one part of the problem. Many prioritise cost savings ahead of other important factors. I’ve lost count of the number of tenders I’ve seen where cost is the main award criteria; quality doesn’t matter as long as it’s cheap. This bad behaviour squeezes the price and it very quickly becomes a race to the bottom in nearly every measurable factor — save for hourly or day rate. In order to win business, suppliers cut costs (and corners) in order to deliver an ever more competitive hourly rate. They do this by hiring inexperienced staff working for a slightly more experienced project manager. Not the best recipe for success but you pay your money and take your choice.
What if you prioritise your development partner based on accuracy, quality and transparency above all else? What if you choose a partner based on their number of senior engineers, tenure in the role, robust development practices and use of a proven quality framework? You hire the brains and not the brawn? The cost per hour might be a little higher, but the quality, delivery timescales and value for money would be significantly improved.
Consider this. It’s a milestone anniversary. Do you take your partner to the best restaurant you can reasonably afford? The one with quality service, ambience and amazing food? Maybe you opt for the greasy burger at a drive-through? It’s faster, cheaper and they might get your order right. Which option meets your partner’s expectations and also delivers the best value?
Prioritise quality/accuracy over cost because you’re the one that has to live with the consequences. I’ve learned that lesson the hard way.
About Tarmac
Tarmac designs, builds, scales, and supports exceptional software.
We are technology agnostic and leverage a wide array of modern languages like Ruby, Javascript, Python, and Java. We help our clients deliver higher quality software quicker by relying on our proven software development approach, the “Tarmac 10”.
