Technology Outsourcing: Caveat Emptor!!!

  • We tried it and left a terrible taste in our mouth. Our idea was simple yet out of the box. It could solve the problems of savvy online marketers and it gave large corporations opportunities to enter new markets.

    It was a project that will take time, effort and capital to build. Although we had the money to build this idea, we lacked manpower.

    How it all began

    One of our contacts pitched his service as a “broker” of outsourcing development projects to India. We gave them a clear and concise set of instructions. They claimed to be competent and familiar doing such projects so we hired them. The contract stated that the project will be completed in 3 months with 3-4 employees on board. When the due date neared, technical problems occurred. A month later, we were assured that the project will be complete in a few more months.

    Recently, we sent our contact an email to find the current status of the project since they were already 3 months over due. To our shock, the broker fired the programmers that worked on our project due to their incompetence – That was it!!!

    If we didn’t request a status update, we never would have known that our project was abandoned. After wasting 6 months of our time and quite a bit of capital, we received nothing. If we were to hire another team of programmers, they would probably want to start from scratch and not continue on what little the outsourcing company provided.

    Aside from this loss, we’ve also had unsatisfactory results from outsourcing to individuals from a foreign country.

    If you want to consider outsourcing your projects, learn from our mistakes and do the following:

    1. Conduct intensive research on the outsourcing company. Ask them a lot of questions and also contact a few of their past clients to know more about their performance and habits.

    2. Deal with companies directly and not through a commission based broker. Should you consider working with a broker, make sure they have been in the field for a number of years. Don’t work with people who are new at brokering outsourcing projects because their lack of experience will be at your expense.

    3. Have an iron clad contract

    4. Be careful when hiring individuals. Make sure you’re confident with their competency and communication before assigning them work. It also helps to start out with smaller projects.

    5. Only hire programmers full time after they have performed well doing contract work first.

    On a positive note, projects we have outsourced on American shores outperformed offshore outsourcing

    January 4th, 2008 | Giovanna | 5 Comments | Tags:

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5 Responses and Counting...

  • James 01.04.2008

    Hi girl,
    Has it gotten to the point that to hear your thoughts I have to read your Blog……
    Mis ya Gio…. All is going fine.
    Spent two weeks with my family in Ill. My Mom asked about you. I up dated her to the best of my ability.
    Was a bad time to fly through Chicago. Was 6 hours late getting home. 3:30 am….
    Had security lady get mad at me for non complyance at the gate. They seem to have such a short fuse now. It takes the fun out of flying…
    Would love a call from you..
    Want to play bridge or something? Ha Ha……
    Your old friend James……

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  • Your not the first and you won’t be the last. We are an American company and the number 2 rated programmers on which is predominantly foreign companies. We bid on projects and are competing with over seas people who are bidding 10% of what we say its going to be. I’ve noticed that their tactic seems to be bid it low, get the project started and then go over budget. I really believe this is their formula for doing business. And once the client is $5000 in its like they become addicted. “Do I give them another $2000 or just abandon the $5000 I’ve already paid?” The next month is “do I give them another $2000 or abandon my $7000?” And this cycle just keep repeating itself and in many instances, the companies never finish the project (after all, if the project is complete then they can’t bill anymore.) Since the company is over seas, over seas laws apply. Are you going to sue a company in an Indian court?
    I’m sure that there are exceptions to the rule and there are some fine companies over seas. But my personal experience is at least twice per week I take a call from an American who outsourced to India and is now calling me to see if I can complete their project (and the Indian company has their source code which is then ransomed off.)

    Anyway, I’m sorry for your experience and appreciate you posting about it. People need to be aware of these issues before they sign the contracts.

  • My personal opinion is that an American company is unpatriotic when they sell to Americans but build overseas. I realize big business has everyone brain washed, but there was a time when “built in America” meant something. Other countries do NOT let us do this, why shoud we let them?

    Trickle down economics (and like theories) don’t hold water any more because big business is spending all that money overseas. Any actual trickle down effect goes to foreign contries. To me, that’s unpatriotic.

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