Excerpt from Chapter 3: How to Select Your Outsourcing Vendor

It is our choices… that show what we truly are, far more than our abilities. - J. K. Rowling, in Harry Potter and The Chamber of Secrets, 1999.

In his 2004 presidential campaign, John Kerry criticized George W. Bush for the failure to capture Osama bin Laden. According to the New York Times,11 Kerry asserted that Bush had “outsourced” the job of capturing the terrorist leader to “Afghan warlords who let Osama bin Laden slip away.”

“Whether you agree with Kerry or not, his remarks emphasize the importance of picking a good team if you do outsource. By far, the largest success factor in outsourcing is selecting a good team to begin with.”

How do you do it? This chapter will show you an objective three-step process along with several tools and a list of selection criteria you can use to make sure you pick the right vendor for your software development.

A VP of engineering at a software company told me that it took him more than five months to select an outsourcing vendor. On his own, he carried out a careful search for an outsourcing vendor in India, China, and South America. He sought a low price point to give him a specific cost savings over hiring engineers in the U.S.

He evaluated 22 vendors in these three countries. Then he made nine site visits. Site visits are not always necessary, but in his case the company was interested in a build, operate, and transfer (BOT) arrangement giving it the option of transferring the team to its own subsidiary.

After all this work, time, and money, he still got less than satisfactory results. He selected a U.S. - owned outsourcing vendor with an operation in China. The vendor was in the process of acquiring a second team of programmers in China. The VP found this second Chinese team to be excellent, and they quickly sketched out an architecture and design for the software that was needed. He then worked out the financial terms with the U.S. - based vendor and signed the agreement.