How to Choose an Outsourcing Vendor (Part 1)

As humans, we have a tendency to overcomplicate things. When a direct-to-vendor outsourcing relationship fails, we rush to attribute cause without really understanding the underlying variables.

“The code wasn’t maintainable.”

“The team kept missing deadlines.”

“We couldn’t settle on a scope.”

“The time zone difference was too challenging to manage.”

These may all be true, of course. But chances are if you’re experiencing a negative outcome, it was baked in from the outset.

What do we mean by this?

We see far too many clients treating an outsourcing partner selection exercise like a procurement exercise, and far too few treating it like the recruiting exercise it truly is.

If you could wave a magic wand and suddenly have a pool of available candidates available in your local market, chances are they’d have a varied mix of ages, genders, experience levels, competencies, portfolios and, yes, price ranges.

You’d identify what your ideal candidates looked like based on your requirements, and then select the ones that best fit your description. If you needed Intermediate and Senior developers, you’d expect to pay market rates - and if someone should be earning (say) $125,000/year but was willing to take $60,000, your nose wouldn’t be playing games on you by telling you it smelled rodent.

So why then would you employ a different technique to selecting your outsourced team?

You know what you need skills-wise. You know what experience they need to have. Presumably you know what hours your existing team works. And if you employ a partner like Fuel to help you select the right team, you will know what relevant rates are in whatever geography you choose.

And yet. Time after time we see companies trying to save $5-10/hr and making life significantly more difficult for themselves than it needs to be, by selecting the lowest quote or pushing themselves to hire from an overseas jurisdiction without being set up to manage time zone offsets.

So how do you do it right? You simplify.

First, get clear on what you want.

Second, search for firms that match that criteria.

Third, choose the firm that best matches your requirements.

It sounds simple, but it’s harder than it looks: it’s often easier to have a 3rd party digest your requirements; search and filtering is much higher effort than you’re expecting; and selection can be simplified if advised by someone “without a dog in the fight”.

This is what we do all day, every day. Want to simplify? Give us a call.

Stay tuned for Part 2 of this series.

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