To start with, as we underlined in one of our recent blog posts here, the answer is definitely not “just based on the price offer” for a particular case.
Among the fundamental principles of project management is the fact that if something goes wrong with one of the major competing project constraints such as scope, budget, quality, schedule, resources or customer satisfaction, at least one or more of the other project constraints is also affected. While it may not be seem to be so, this principle is directly relevant to the question of how to select SW outsourcing partner as well. How? We’ll come back to that in a moment. First let’s talk have a look another common pitfall.
“Selecting” anything basically means that you must have more than one alternative of what you are considering to choose from. Take, for example, any simple daily decision such as choosing a restaurant for dinner, a pair of trousers to buy, etc. Even for these insignificant issues, you consider many alternatives, right? Surprisingly enough, experience shows that ones who are looking for a SW development outsourcing partner do not consider as many alternatives as needed. While there is no hard figure such as at least X number of companies must be considered for each particular case, if you are aiming to choose a SW development outsourcing partner, you need to make sure you have considered several alternative companies of the same and different scales.
If you have not earlier taken part in such a selection process, you may right-away tell that above fact of the need to contact several alternative companies goes without a saying. However, there are a few reasons why the real practice is on the opposite. The main reason for this is being in contact with several companies at the same time needs considerable amount of resources, time and efforts from the side of the party that is aiming to choose a SW outsourcing partner. Also, when you evaluate several SW development companies and pursue correspondences with them at the same time, the accuracy of the responses you receive depends on the time and efforts you allocate to each alternative company you take into evaluation – more serious you approach them, quicker you respond to their questions and the more you provide clarifications about the case, the better responses and quotations you receive. (These practices are actually valid for any tender process but if the issue under consideration is SW development, these usually gain more significance).
So you have shortlisted several companies of different scales, contacted them, received their responses and need to make a decision on which to choose. What are the important factors you better take into account and what method you shall follow for the selection process?
Here we come back to the project constraints we mentioned at the beginning. You shall aim to evaluate capabilities of each alternative company on each relevant project constraint. In example, if the company’s output will be at the quality you desire, what is the risk of the company for going beyond the schedule, is the company financially strong to finish the project within the budget, does the company possess enough resources for delivering the project and so forth. Furthermore, the communications and response quality of a company during the tender process give away many clues about its possibility to deliver the project successfully. These decision factors may be used as part of a scorecard approach to make an overall decision on the outsourcing partner.
In addition to the efforts from the side of the client, we as SWExperts always share a self-evaluation of our company with our potential clients in the form of SWOT analysis. We openly share with our potential clients what are our strengths, weaknesses, or what opportunities and threats may exist in a partnership with us. We also encourage our potential clients to ask the same from each company they are taking into consideration.
Another important practice to follow as a part of selecting your SW development outsourcing partner is evaluating the past experience and references. However, while doing this, one should keep in mind that if the best team on paper would have always won, championships would have been awarded without the games being played. Therefore, as the price level that shall not be taken as the only factor in the selection process, past experience should also not be the sole basis of the selection. In addition, while evaluating the past experience, you shall try to understand how successful had the things gone while reaching the outcome of the particular reference job – i.e. was the project completed within budget or schedule. Lastly, you shall put yourself in the shoes of the previous client of the potential SW development partner you are evaluating and try to judge if they are breaking any NDA engagements presenting the work done for another client to you.
Last but not least, you shall active communication with the potential partner – not only by e-mails but at least with video & phone calls. Meeting the other party in person is always the most preferred way and you shall also look into the option to arrange a trip to their location or ask them to join a meeting where you are located.