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Outsourcing always involves a partnership between two organizations. Even in a captive model, regional organizations can be seen as the cooperating partners. Such Outsourcing relationships are very complex. The processes and needs have to be handled with care and an understanding of the other party. Failing to do so will cause problems for both, the customer as well as the service provider. It is a fact that customers are the most important part but does it symbolize that they are always right? Or they can never be wrong?

After a close research and experience in handling Outsourcing projects, from an operational as well from a contractual perspective, pliXos agrees to the fact that not always are the providers responsible for failure of an IT Outsourcing engagement. Customers can also be responsible for failure of their projects in a number of ways.

The bullet points below highlight one of the few possible mistakes by customers/clients in Outsourcing software development and how to mitigate them.

  1. Failing to truly understand one’s project and the needs can be a major mistake and make things difficult for your providers: As a customer/buyer it should be the top most priority among all the tasks involved in Outsourcing a software development project. A customer who knows clearly what exactly does he need or require has made his first step towards being successful in Outsourcing software development

  2. Lack of provisions for seeking Automation/Innovation of some processes in Outsourcing: Many respectful providers have invested in latest technologies to increase their capabilities and service delivery and value of work realized from Outsourcing for their customers. Similarly, customers should also move forward and learn from their past mistakes and adopt these technologies in order to create an intelligent automation strategy through tools and online platforms. It is important for customers to implement structured processes and automated testing across the fully integrated development cycle. This improves the work and makes it easier for providers in meeting expectations.

  3. Low Engagement with the SW Service Providers: The major reason why 4 out of 5 Outsourcing contracts fail is due to communication gap between the customers and providers which can lead to lack of motivation among the service providers. As one example, application design thinking and implementation depends equally on both the customers and service providers. Design thinking concept is a time and tested method which brings the buyers and service providers together and gives way to develop innovative ideas and concepts for a better outcome.

    Minimum level of interaction gives a feeling to providers that they are working as partners for the clients and not merely vendors. In return the providers are able to understand the clients/customers requirement better and keep things aligned for both the parties. Think of who will benefit the most from these small little actions?Of course, the customers. In short it keeps both parties in same wavelength with the project. If people implement scrum properly across teams, and ensure proper management attention plus building on right governance tools the project should be on track

  4. Initial Provider Evaluation: As Outsourcing involves investments, customers should be very clear with their choice of service providers. Globally distributed software development involves a good investment but before disbursing your money a closer review of your partners saves you from future discrepancies. Evaluate closely whom you are Outsourcing to and where in the world.

    As the risks involved are very crucial, it is observed that customers seek help from 3rd party or consultants in this regard quite often. Clever customers may do it themselves by using the SaaS tool Outsourcing Advisor. Best way to solve this is to ask all the right questions related to your project with the providers you are in talks with or have shortlisted

    Fig 1 Subset of criterias Provider Evaluation pliXos OutsourcingAdvisor 450
    Fig 1: Excerpt of criteria for Provider Evaluation with Outsourcing Advisor

  5. Lack of Due Diligence: Most important of all the criteria’s for a customer should be to do a profound due diligence of the final providers considered. Reference checks from previous customers, provider ratings online, verified experiences etc. are important points while considering a provider for Outsourcing software development. This saves the customer as well as the project from going into wrong hands. This saves time and cost

As known to all, there are two sides of same coin and two sides of same story, one is how it has been presented to you and other part is how you accept or perceive it after self-analyzing. Similarly, Outsourcing in services industry especially software, we can say that Outsourcing if it is not done right, can cost the companies in a bad way.

In the earlier articles we have already spoken in detail about the risk’s involved and rewards one can make through Outsourcing software development at onshore, offshore, nearshore location, with a focus on evaluation of service providers before engaging into Outsourcing relationships.

Fig 2 Subset of Search Criteria in pliXos B2B Marketplace 450
Fig 2: Identifying most suitable provider via pliXos online B2B Marketplace

In addition to the above points regarding mistakes a customer is likely to make, pliXos by acting as a General Contractor for Outsourcing Projects can take into consideration several other aspects of software Outsourcing at onshore/nearshore and offshore fronts. Further offerings are the online tools in the form of Software-as-a-Services and additional advisory services in the form of SAaaS® which has helped its global customers to ramp up their projects, shortening their project time, and eventually save extra costs in the entire process.

One example of the online tool is the Outsourcing Advisor, which allows a customer to set parameters fitting his contingencies and get an overview of his project. Witt he use of the Outsourcing Advisor customers can get the value of a typical consulting project which would cost more than 30,000 € for a price of 1,000 € per month per user.


Though many companies in past have gained significantly from Outsourcing there is still a lot of scope for SME’s especially to experience the benefits of it. Online customer ratings and reviews provided by previous customers are a highly valuable source of reference. Tools like the OutsourcingAdvisor which simulate proper business case analysis before a company enters into a contract with a vendor help in preparation of the individual case.

The free B2B Marketplace brings together customers and service providers on the same platforms and allows the SME’s to enjoy benefits of lower labour costs in a different geographical location, improved scalability and synergies.

Looking to explore opportunities in Outsourcing your software development or application development while working with external agencies? Check out the best offers for your company here


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