Contracts are the key to successful outsourcing. If you don’t define what is being measured for success, or what the expectations are, then you are only asking for trouble with misunderstandings. Where one person might determine an “incident” to be changing a password another might not. How important do you think good contracts are to successful outsourcing? Has the wording in contracts had an impact in projects you’ve been involved with?
Contracts can also be terrific places to create incentives to deliver great quality or beat schedules, by offering bonuses and other inducements. For example, in maintenance agreements it can be a great idea to pay bonuses for smaller number of over-all incidents rather than pay on a per-incident basis. If developers are getting paid for fewer hours worked, it is in their interests to build things right the first time and to take steps to reduce the number of support issues that could arise.
These are just a few of the examples I gave on the impact the contract can have on the success of your outsourcing in a podcast interview for the Software Engineering Productivity forum. Listen to the entire podcast here. Unfortunately the sound quality is not optimal.
3 comments:
Successful sourcing begins not only with common goals but also recognizing and accepting individual interests. By capturing this in a joint business case it is transparent for all involved. The contract contained the essence of this, the contract also has a particular legal context.
Managing the realization of this business case is the foundation for successful sourcing. During the course of the contract, the original principles may be subject to a changing world. It requires you to review the business case periodically to validate.
Conflicting interests such as low price for the client and contractor for the low margin contracts lead to fights with little success.
This is a great forum to tell you how much fun I had doing the interview on behalf of the SEPForum - we have also been getting great feedback on the series of podcasts in general & this interview in particular. I am sure the 25000+ members of the Software Engineering Productivity LinkedIn group would love to hear from you again Frank.
i agree with you but not only out sourcing, every successful business is begins with contract. Contract is the thing which protect both parties.
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