The days of picking an outsourcing destination based on price alone are over. Along
with modernizing their project management approach with offshore vendors, organizations need to change the way they select and evaluate them. In an environment
where speed to market is critical, working with a vendor who lacks experience or skill—
usually the case with the lowest bidders—substantially increases the risk that a project
will not be delivered on time or that it will fail to meet the outsourcers’ goals.
Cost considerations must be balanced against a vendor’s capabilities, experience
in the market and fit with the company, says Atul Vashistha, chairman of The Neo
Group, an outsourcing consultancy in New York, New York, USA. Mr. Vashistha and
Vimal Kumar Khanna, managing director of mCalibre Technologies in New Delhi,
India, offer this advice on choosing the right partner for the right project.
■ Focus on core skills, outsource the rest. With new technologies accelerating the
pace of change, companies often lack the in-house skills and experience to deliver
leading-edge projects. Rather than hiring employees and learning through trial and
error, look for a provider who’s done it before, says Mr. Vashistha. Working with an
outside expert can lower risks and allow in-house teams to focus on leveraging their core skills.
■ Experience is critical. If you are outsourcing a high-value, innovative project, a team that
has done similar work before is a must-have, Mr. Vashistha says. He advises checking client
case studies, interviewing the vendor’s project managers and resources, reviewing samples of
its work and talking to past clients. “You want to be sure they have the scale and expertise to
deliver your work,” he says. “It’s not uncommon to find a vendor who’s delivered 10 similar
projects that year alone.”
■ Do a test run. For very complex projects involving advanced technologies, consider running pilot projects with a short list of vendors to make the best choice, Mr. Khanna suggests.
“It involves additional cost, but the success of the pilot will convince you that the vendor has
expertise in tackling your challenges.” After selecting a vendor, make sure the team it used
for the pilot is the same team that executes the actual project.
■ Hold face-to-face meetings. At the start of any project, bring the vendor’s team to the
office to participate in requirements capture, knowledge sharing and relationship building,
Mr. Vashistha says. Then, in the early phase of the project, send a project manager to the
vendor’s office to oversee early progress. “This shadow/reverse-shadow approach is a good
outsourcing practice to make sure the vendor team is doing the work you expected,” he adds.
AN IDEAL MATCH
OC TOBER 2014 PM NET WORK 47
ers who can execute a project without being micromanaged “takes a more
ach” that can be more time-consuming. “The old way of managing these
u need to build trust so you can focus on moving toward common goals.”