5 Mistakes when Outsourcing your Development


Many companies are outsourcing different IT development projects. Whether it be application development, website development, custom development, product development, or basic online marketing and management. I wanted to highlight some of the most common critical mistakes we've seen at Chunk Munk Technologies by some organizations when choosing and working with an outsource company. This isn't specific to off-shoring, this can be with any 3rd party development service company.

1. Pick the right Company

This is critical. Many people chose a company based on cost alone. Some choose based on image (I've heard of these guys so they must be good). It's always a good idea to get a referral from someone who's had a good experience. Remember however, especially in larger shops, a good experience with one team can be different with another team from the same shop. As much as companies try to put in standards, much of the success is based on the people you're working with.

Also, don't pick solely based on the Sales Manager! A smooth talking sales man could be in front of a dysfunctional organization. Alternatively, I've seen great companies lose out on contracts because their sales man isn't as strong.

Use the Sales Manager as an introduction but make sure to meet with at least one person from the core team that you will be working with. This will give you a great intro into the actual people you'll be working with. Make sure you're comfortable with the team you'll be using.

2. Ensure Expectations are Clear

Unclear or assumed expectations up front can be killer. Remember there is no stupid questions. Clarify what exactly is being delivered, what is not being delivered, and how changes are managed. In many cases, disputes later on in a project stem from misunderstandings on the expectations up front.

A reputable shop will have no problem going through these details with you. If they pressure you to sign without making sure you're comfortable with the details, go to a different company. Many will outline unrealistic expectations up front with promise of significant project delays if you question in order to get you to signature faster (E.G. We will get all your requirements done in 1 week, if you don't agree to the requirements in a week, it will take 3 weeks to get the details ironed out). Seriously!?

Notice there's a different in up front expectations and up front requirements. You won't be able to get to in depth details up front, but the expectations at a high level should be crystal clear.

3. Managing Change

A reputable company will have a solid foundation of managing change. For many companies change management is painful. The expectations set up front are their golden ticket for payment. For Chunk Munk, we work in an Agile fashion. We know it's completely unrealistic to not have any change in a project once you start interacting with us and seeing a tangible product. We manage that with you to make sure all changes are understand, impacts to the project are agreed to, and we move forward, on a consistent and streamlined manor that works for you, and us.

Change is critical to developing the right solution compared to the original asked for solution. Sometimes they don't end up being the same. It just has to be managed, communicated and agreed to properly, in a streamlined and efficient manner.

4. Don't be fooled up Front

Being in the industry this really grinds my gears, but there are still MANY companies that will promise amazing pricing, great timelines, and un-heard of deliverables. If it sounds too good to be true, it is, period. You are not getting a deal. Let's face it, companies are in it to make money. For them to undercut drastically, there is a "scheme". Either they will provide you a template development project (you'll get what they have vs what you want), or they will make sure they sign the contract and will nickle and dime you down the road. There are absolutely businesses out there that do this. If you're getting a website for $100, you're getting 1-2 hours worth of effort. Anything more they don't make money. The math doesn't work.

To make it harder, I've seen reputable businesses and industry experts that don't know they are even doing this. They think things are easier than they are, they don't estimate properly, or they simply don't think of all of the angles. They might be great at development, but bad at business, sales and estimating. By making sure the expectations are clear (number 2), you can help to drive this conversation to better accuracy if you're working with a business that doesn't drive that conversation for you.

5. Don't be Scared to Cut your Loses

Plain and simple. A LOT of businesses start down a path with a shop, have a bad experience, but try to ride it out. The investment's been made, how do we make the best out of it? Don't be scared to cut your loses. Even talking to other companies and how they can take over and help. It can be a hit on the ego for some, I'm not going to lie. But this is about business.

In many cases cutting your lose with one shop and moving to a better one will only benefit you in the long run. Don't be fooled, the unfortunate reality is you will pay for partnering with a bad shop. Slowly if you stay with them, your product may suffer, your clients may suffer, your business may suffer, or you may have to rebuild later to scale your business. A reputable company will have a conversation with you for no cost and understand where you are and help you build a plan to move with the least amount of impact.

Outsourcing your development can have great benefits. You know your costs up front and you don't have to carry the cost of employees. Building a powerful team that delivers can take time, leveraging ones that already exist can get you there right away.

Be careful though, as it can be hard to find a good mechanic, a trustworthy handyman, or a great bookkeeper, it can be equally hard to find a great development shop. Don't be pushed around, partner with people you trust, and don't be scared to cut your loses.

Interested in finding out more about Chunk Munk? Check our our website or feel free to contact me directly.

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