Part I: What Management Risks Can Damage Software Development Outsourcing?

Main Contents:

Working with our clients, we found out that before reaching us, they have gone through bad experiences when outsourcing software development. The results were dissatisfying and sometimes disastrous. We have dug deeper to find out these common “warning flags”; if properly heeded, can help a company proactively remove barriers to the success of software development outsourcing. There are 3 dimensions we will want to analyze: Business, Management and Technology. Each of there 3 dimensions has 5 key risks.

In this articles, let’s dive into 5 risks most commonly seen inside “Management”.

“What is Management Risk?”

At a meta-level, management risk is that’s introduced because the person(s) ultimately responsible for stewarding the software development project fails to ensure that good structure and team dynamics exist. Without good management practices, an otherwise viable software development project using an outsourcing partner (good concept, clear business benefit, capable partners, solid technology) becomes like a rudderless ship at sea.

A current-day situation which exacerbates this type of risk is the growing adoption of highly iterative development methodologies such as Agile. Many project teams have abandoned classic waterfall-style methodologies. The reason is that a rigid, top-down, unidirectional progression of software design and development is inefficient. “Big Bang” deployments are replaced with weekly “Sprints”. However, what’s sometimes left behind is a commitment to clear milestones, progress tracking, etc. Good project management rigor has, occasionally, been wrongly abandoned for the cause of “speed and nimbleness”. Ironically, speed and flexibility versus good process and structure are NOT mutually exclusive — you can have it all.

Management Risk #1

Any leader with experience in contractual relationships knows that disagreements can arise over contractual obligations. “Well, what was intended by that part of the agreement is…” has been said time and time again. Reasonable parties working together can usually find a palatable compromise – but unrealistic expectations can derail the relationship. Here are two of the most common circumstances we see:

Cause and effect of delayed decisions: We see customers take a very hard line on due dates or cost without regard to the delays they caused because of low involvement in the creative process. Don’t presume your outsourcing provider can “make up for lost time”.

Industry expertise versus company intimacy: Perhaps in your due diligence you were careful to select a software outsourcing company with experience in your industry vertical. Vertical expertise is important – but it’s NOT the same as having intimacy with your company’s situation. Be very self-aware of nuances of your company: culture, organization, business model, and even product distinctiveness – which could impact a third-party’s effectiveness if not properly understood.

Management Risk #2

Oversee projects, manage crucial work segments, and make sure business rules are infused into program code. Ideally, all leaders are willing – and able – to focus on the software development project as a top priority. But that’s not always the case.

Sometimes the “right” stakeholders – based on knowledge or skill – are assigned to a project, but the assignment doesn’t take into account the need for focused attention on the project. Will the leader need some backfill or bandwidth to ensure other business needs are addressed? Have other business priorities been properly factored into what may land on this person’s plate?

Occasionally, we do see distracted project managers. For a variety of reasons, including competing priorities, a project manager may be “mailing it in” — not enforcing work progress against a plan, not keeping a rhythm of status reporting, not tracking project metrics, or not managing good change control.

To be continued…