How to recognize problems in outsourcing? A supplier perspective

The most common goals in outsourcing are improving customer (user) satisfaction, cost reduction and access to more flexible or capable human resources.  When everything goes well these goals are achieved: both customer and supplier thrive by the relation. Unfortunately many outsourcing partners struggle in achieving these goals. What are common symptoms and causes of failing to achieve these goals?

This question can be answered from three perspectives: customer, supplier and together (both customer and supplier). This blog post focusses on some of the challenges that suppliers experience. In the following posts the other perspectives will be discussed.

In our book Quality Level Management- Managing Quality in Outsourcing we mention several major challenges suppliers experience in obtaining desired product quality:

  • Time and budget are fixed, but the scope keeps changing, which makes it impossible to achieve or sustain the quality desired;
  • It is unclear what the customer actually wants. Requirements are unclear and ambiguous.

Scope changes

Anyone who has been part of a customer supplier relation will recognize the discussion whether an issue is an error or a change.  Having such discussions is healthy and part of the game. Too much discussion is however counterproductive. Also for the supplier! Asking more money for each scope change is often a supplier strategy to earn more money…

… but the supplier is not always to blame for not delivering in time or what’s needed. In public tenders suppliers often make unrealistic offers to get the deal. Customers primarily select suppliers by price, but mistakenly expect to get the best quality. Customers who only take and never give should not be surprised suppliers ask money for each change. Discussions and indecisiveness at customer side can frustrate the schedules, quality and moral at supplier side enormously. The 2e Maasvlakte was much cheaper than budgeted; partly because there were no long (legal) fights over scope and the suppliers could do the work effectively.

 Unclear and ambiguous requirements

Customers often do not know what they want. Part of that is human nature. Not expecting to have any new insights during a project is an illusion. For this the agile methodology or change management are common practices. Having said that, customers very often seem too immature to make this work and implement these processes well. Customers have difficulty managing their long list of stakeholders, requirements and wishes. Sometimes because the customer has little experience in managing IT projects. Sometimes because the customer organisation consists of several companies or is very hierarchical. Sometimes because the only focus is on budget and schedule, until reality kicks in during acceptance testing and quality becomes more important. And sometimes the customer has too much money to spend. In the latter suppliers are most willing to help. In the other cases Quality Level Management can help both customers and suppliers.

The first step to improvement is awareness on how both organisations work and how realistic expectations are. The second step is selecting appropriate measures according to the QLM model, see our previous post on QLM. As the causes mentioned in this blog are on several levels (product, process and organisation), measures should be taken at the appropriate level as well.

An example

The previous can be illustrated by the student and personnel registration system of the police, see http://nos.nl/artikel/509248-strop-dreigt-voor-politieacademie.html. Three years after the start of the project customer and supplier have ended up in a legal discussion. The first symptom of problems ahead was the poor quality in the system test (and probably even earlier having unclear requirements). The supplier claims this is caused by little involvement of the customer (organisational level), immature defect management (process level) and regular scope changes (product level).

Measures Police Academy in QLM Model - supplier view

Using the QLM model appropriate measures could have been selected.

  • Stakeholder management, e.g. defining a stakeholder web, would have made the lack of involvement of the customer more clear.
  • Agile development, in which small pieces of functionality would have been delivered in several iterations, would have decreased the effect of scope changes and problems in quality would have been detected much earlier.
  • Proper defect management could have been conducted as soon as it became clear that there was an issue in analysing defects.
  • Clear requirements would have made it easier to make the right product. Although this is primarily the task of the customer, the supplier could (and should) have asked critical questions.
  • Witness testing in an early stage by relevant stakeholders would helped to detect poor quality much earlier.

In this blog we spoke about suppliers having to deal with several challenges in obtaining desired product quality.  Without good governance of the customer this is not an easy task, but several measures can be taken. Next blogs we’ll look at the subject from a client perspective and how both partners can work together in achieving quality goals.

About Jeanne Hofmans

Jeanne Hofmans has studied Software Technology at Utrecht University and now is a test consultant at Improve Quality Services. She has participated in many projects in both the financial and the technical domain. Lately Jeanne has worked as a test manager for the Sluiskiltunnel and as an auditor for several other safety critical systems as satellites and tunnels. At the moment she is a test consultant at BMeye. Jeanne is co-author of the book Quality Level Management – Managing Quality in outsourcing Jeanne is ISTQB Practitioner in Software Testing and is certified in TMap Next® and Prince2. She is an accredited tutor of ISTQB® Foundation. Jeanne is accredited by the TMMi Foundation as TMMi lead auditor. She is a member of TestNet, the association of testers in the Netherlands. She is also a member of DEWT (Dutch Exploratory Workshop on Testing).
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One Response to How to recognize problems in outsourcing? A supplier perspective

  1. Ah ! Great information regarding problems in outsourcing. In most of blogs I read about only uses and advantages of outsourcing however you also mention how to recognize problems with example. Best information regarding outsourcing I ever read..

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