How to spot bad IT outsourcing companies?

date: 7 November 2017
reading time: 5 min

When outsourcing their IT projects, many companies aim at cutting costs, saving time and maximising the quality of their product, in order to boost the satisfaction of their end-customer.

Outsourcing is beneficial, but watch out, as choosing a wrong IT outsourcing partner could be a deadly cure for your business.

‘Nothing ventured, nothing gained’ is a common strategy, as bigger risk usually implies bigger effects… but the results do not necessarily have to be positive. Below is a list of warning signs indicating the worst IT practices. Whether you are already working with an IT partner, or still looking for one, it is worth knowing what to avoid not to make critical mistakes.

1. Not verbalising problems clearly and on time

Success of your outsourcing project depends on clear and direct communication with your IT partner. Regular meetings, video and phone calls during your working hours, reporting milestones and indicating challenges – this must not be an exception, rather a standard. If you struggle to understand the broken English of your partner, constantly beg to respond to your email and beat your head against the wall for unanswered calls, then it’s high time to rethink the possible partnership or even to say goodbye. Misunderstanding is a clear path to frustration.

2. No record of previous successes

Building a good relationship with customers always pays off. A word-of-mouth is a very powerful marketing tool and, in today’s business, recommendations have become a key measure of success of products and services, of building trust and of proving experience. No record of previous similar case studies could indicate a lack of expertise and know-how on part of your potential IT partner. Take time to check their website for references or partnerships and don’t hesitate to contact the companies they worked with in the past. If the company has been able to provide high quality software services to similar businesses, then take it into consideration. And if not…you know the drill.

3. Poor quality of the IT product

Quantity or quality? For you the choice might seem obvious, but it is not that straightforward to everybody. Beware software providers who prioritise quantity and where quality often suffers. The worst IT outsourcing companies lack trained and certified Quality Assurance Engineers and Software Testers. Poorly qualified employees increase the risk of failure in product delivery. It is also crucial to make sure your product is not left alone after the project, without support or maintenance, and your business without decent customer service.

4. Overstating expertise level

Nowadays people with even minimal technical skills are able to get online diplomas and call themselves IT experts. Be careful not to fall in the tech bubble of companies talking big on innovation, being in fact a three-person fly-by-night kind of organisation. This leads to untrained employees working in companies with no significant experience, that are being entrusted with problems too complex for them to solve. Not to mention a case with a ‘big shot’ arranging the cooperation – suggesting they will be in charge of your account – being later replaced by junior developers, never for you to see the big boss again.

5. Poor time and cost estimations

‘It’s going to take longer and cost more’ – this sentence ensures sleepless nights for every manager. The last thing you want to face when outsourcing your IT project is hidden costs and delays in delivery. However, don’t forget that bad outsourcing companies are motivated merely by profits. In the worst-case scenario, they will look for increasing them at your expense, inflating hours and doubling the previous cost or time estimations. Avoid vendors proposing contracts stating that you must pay for every change. Do not hesitate to ask time- or cost-related questions any time you are dubious.

6. Saying ‘Yes’ to everything

Cultural differences often emerge unexpectedly. Watch out for companies saying ‘yes’ to everything and having hard time saying ‘no’. For some cultures, it is especially hard to say ‘no’ as face-saving is super important. This results in indirect ways of disagreeing that often actually sound like ‘yes’ to us, resulting in missed deadlines to our surprise. This issue also has another dimension – employing engineers constantly agreeing to everything is not always good for your project. Challenging your point of view gives interesting outcomes and proves experience gained in previous business cases. On the contrary, be alert not to lose managerial control over the project.

7. Being good at excuses

Low productivity and missed deadlines come hand-in-hand with a wide range of excuses. Worst IT outsourcing companies are weak at taking responsibility for their tasks and thus fail to deliver. Disorganisation and demotivation on the vendor’s side result in frustration on the customer’s side. Look for companies that are client-orientated and good at listening and discovering your needs. This will ensure stable progress in the full scope of the project.

How to avoid bad IT outsourcing companies? Whether at the early stage or after a long time of cooperation – mysterious pricing, constant delays, communication breakdowns and non-delivery are enough to take a separate path from a vendor. Don’t hesitate to make hard decisions, as a wrong IT partner is a threat to your business. Aim for companies eagerly raising the bar higher, using the best technology, software and infrastructure in order to satisfy the needs of end-customers. The very point of outsourcing is to provide benefits to your company, so ensure the vendor is there for you to achieve this goal.

Now you know what to watch out for in terms of bad IT outsourcing development practices. Nevertheless, we are sure that a good outsourcing partner will deliver value to your business.

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