Top 3 Outsourcing Traps to Avoid

What happens when you are in a situation where you desperately want to get out of but all the doors seem like closed? Think of a stock which you have invested in which keeps declining every day but the analysts keep telling you the fundamentals of the company are strong and it is showing resistance at this lower level and urge you to “level” out your decision by buying more. You oscillate between selling off or buying more and the hope of saving your investment – you would invest more and more.

Think of another situation when you have invested in a mutual fund – a tax-saver mutual fund to be more specific, where you cant liquidate your investment before the ‘lockin’ term is up. And you see that there is nothing which can be done because you cant take your money out as the contract duration is pre-decided. Even if the mutual fund degrades in value, nothing much can be done.

The third situation is when you need a Health Insurance policy for the current year but you are lured into investing in Term insurance policy! When you then fall sick, the policy guy and the insurance company both say that your illness is not covered!

These are the top 3 traps which you should avoid at all costs. Things are the same when it comes to outsourcing your tasks. Let us see how they translate into our industry.

1.  You are working with a vendor who is not performing well and you cant get out of the relationship because the technology used in software development is so niche that it is very difficult to find another vendor at the rates you can afford.

2. You are working with a vendor who you know is no longer capable of doing a particular project because the competency has been eroded because of attrition but still you cant move out because of the contractual bond you have with the offshore company.

3. You know that you wanted X to be done and currently Y is being done but then you are not aware. This happens when you are not involved with the developers directly. If ignored, this will become a major cost and time waster!

The only solutions, i repeatedly emphasize in my blogs, is due research on the working methodologies at the software vendor’s end. Research will not solve problems since it depends on how deep your research is but one thing for sure, you will not jump in the dark!

Cheers

Sam

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