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In Part 1, we showed you how to Search for and Assess vendors for your outsourcing project. Click here if you haven’t read Part 1.
Now we’ll move on and show you how to Choose a Winner.
Step 3: Choose a winner
Now you have your short-list of vendors who all fit your most important criteria. The question is: how do you choose a winner?
Honestly, you’re going to have to look at each option in detail and use some sort of objective process to rate them against each other.
You should use a process that works for your project. You might need to make your own individual changes, but here are the most important things we suggest you do:
1. Get some testimonials; what do their other clients think?
2. Read some resumes; what skills do their engineers have?
3. Investigate rates and terms; how do the quotes match up, are they within budget, do they seem reasonable?
4. Do a test run; get them to do a small test project to see how you work together
What do their other clients think?
NEVER go with a vendor who has less than stellar references; it just isn’t worth it. You want to pick a vendor with clients that rave about them, clients who use them for EVERYTHING and have done so for years.
Ideally, you want references from clients who are in the same country as you because they are the most likely to have had a similar experience to what you will. However, you’d be silly just to discount someone because they’ve never worked with an American company if they have otherwise brilliant testimonials.
In terms of specific questions you should ask, you should generally focus on the EXPERIENCE of working with this particular vendor:
1. How creative are they at finding solutions to problems or simply better ways of doing things?
2. Do they work together effectively? How well do they communicate as a team?
3. How much management do you have to do as client? Will they operate independently, or do they need ongoing direction?
4. Were there any problems or issues?
Why resumes are often a waste of time
When you hire an outsourced team, that’s exactly what you’re hiring… a TEAM. The skills of the individuals matter a lot less than the team’s ability to deliver as a whole.
Often, if you receive a stack of resumes, the people who end up working on your project will be completely different from the ones in front of you. Team members will change, as the skills needed for a particular project will often require bringing in a developer who’s resume you may not have seen originally.
So you’re probably wondering…
Why look at resumes at all?
Here’s the thing, they give you a snapshot of the skills your engineers are likely to have and thus, a good idea of the team’s expertise as a whole.
Also, when you get closer to hiring a team you can get a bit more serious and ask them to assign engineers to your project so you can vet them. At this stage, it’s not uncommon for a client to ask to interview engineers by phone or instant message.
This is one of your best opportunities to really find out for yourself if these are people you can work with. Try to ask them questions about past projects what they might do for your project, or give them a random issue to solve so you can see how they deal with things.
How to get a good deal
Let’s be totally honest here, one of your biggest motivations for outsourcing is saving a boatload of your hard-earned cash. Am I right?
The good news is, you can absolutely achieve that and you should EXPECT to do so because not only are most vendors’ rates very reasonable, they are often negotiable.
Just be careful not to drive too hard of a bargain, especially if you’re going to make the mistake of comparing outsourced apples to outsourced oranges, which is very common…
“I can get a very committed, skilled guy in the Philippines to do this for less than $10 an hour and you’re asking me to pay HOW MUCH?” You wouldn’t believe the number of times we’ve heard that and we understand why but here’s the thing:
As you just learned, you’re hiring a TEAM with all the benefits and costs associated with such. It costs a lot in overhead to pay for offices, salaries, computers, software licenses, etc.; so you will pay more than you would for an individual programmer.
What’s more, it’s significantly cheaper than hiring a team of the same skill level in the US; so don’t make the mistake of comparing outsourced apples to outsourced oranges.
You will very quickly discover that pretty much everything is negotiable when it comes to pricing and terms, so it’s very tempting to make compromises you wouldn’t normally consider.
For example, NEVER give away ownership of your source code and ALWAYS make sure the work is done under a proper nondisclosure agreement.
Why you should use a pilot project
If you feel a bit of trepidation at the idea of using an untested developer to create a key part of your software, then you’re not alone. Many companies feel that way and so vendors are used to committing to short-term pilot projects that allow clients to see if they’re a good fit.
Generally this is seen as good for both sides because it allows vendors to prove their worth and clients to make sure they’re going with the right person. What’s more, it mitigates a lot of the risk associated with outsourcing abroad because you can identify any problems before there is anything valuable on the line.
More specifically, there are three reasons you should seriously consider running a pilot project with a vendor:
1. Even when the vendor is a good fit for your project, you’re almost certainly going to come across communication challenges or that you need to iron out before you can work together effectively. A pilot project allows you to do this deliberately and efficiently. For example, see how well they work to your specifications, how good they are at asking for direction when necessary, and how they respond to any changes in said specifications. If they’re worth it, they’ll respond well to all those tests.
2. You can also test their technical abilities; do they have the experience they say they have?
3. Finally, you might as well get something concrete out of the pilot so try asking them to implement a set of non-critical features so you can get a feel for how well the team works, and some new code you can actually use.
Should you pay for a pilot project?
That really depends on the situation. If there is a lot of competition or they are very confident they will win your business, some vendors will offer a short pilot project free. Generally, these will be much smaller projects lasting no more than a week.
Even so, these shorter projects can be very valuable exercises, especially if you take the advice above and have the vendor implement some non-critical features for you. If they’ve had experience with similar projects in the past, you can often end up with something very significant, especially if they’re keen to over-deliver, which they should be.
You may be thinking it sounds like an awful lot of work to come up with an entire project and specifications and then manage a new team for a week “just to see if they’re a good fit.” If so, you’re mistaken because such an approach will save you huge amounts of time, energy, and MONEY in the long run.
Just think, once you’ve completed a pilot project with a vendor who’s worked out and proved their worth, you’ll be ready to move forward with your main project, safe in the knowledge that it will be delivered on-time, on-scope, and on-budget.