As a project manager in the field of IT, you are likely familiar with outsourcing. You may also have a predetermined opinion about it and maybe a horror story or two but stick with me here. No matter what we have encountered in our past experiences, we understand it is common practice for companies to hire external sources, especially when it provides value to those that lack in certain areas.
Outsourcing has the best intentions to cut time and cost, provide access to different skill sets, and allow a more efficient use of a team or company’s resources [1, pp. 508-509]. Work completed by your team and work completed by the external source should ultimately come together and then everything coexists in perfect project harmony. Well, ideally speaking. But we do sincerely want the best outcomes from our internal and external collaborations.
One of the biggest outsourcing mistakes made by project managers lies in who they choose to work with. As an Agile-driven project management team, it is important to seek sources that align with your project philosophies. What does that look like? We can affirm that not all partnerships are created equal, so this week we are delving into what we look for in Agile sources.
Source Selection Criteria: Overview
When seeking outside partners to collaborate with on a project, establishing a baseline of expectations is more beneficial to you than it is harmful. Have you ever had someone in management decide your team is using a source just because his buddy from college heads the operation? It’s a long, rocky road, I promise you. Don’t be that guy.
Just like the process of interviewing potential employees for a job position, you essentially perform a similar process in evaluating sources to accommodate your project’s needs. The potential source first reviews the contract for the work required on your project and if it fits their experience, they proceed to bid for their opportunity.
During the creation of your selection criteria to properly assess these candidates, it is important to incorporate fairness and clarity in what is required for consideration. When reviewing and making assessments, your goal is for everyone to undoubtedly know whether the source meets the criteria or not. And you also want to have a clear picture of the strengths and weaknesses of the source, rather than a heaping pile of irrelevant data. [1, pp. 524-525]
Image: John Schnobrich | Reference: [4]
Examples of general selection criterion could be as follows: [2]
Understands Project Need: A good start to the evaluation process is that the potential source demonstrates a strong understanding of what the work entails.
Cost Effective: If costs are already quoted beyond the planned budget, and are not comparative to other proposals, then it is pointless to keep a candidate in contention.
Technical Skills: Verifying that the potential source has technical knowledge required is also highly important. It is also helpful to know if the potential source is open to learning if the project requires it.
Project Processes: Gaining knowledge of the methods and work styles of the team assists in determining if they coincide with the work style of your own team.
Management Processes: Learning how management operates, including the processes they champion for, will best describe the way they will handle their internal operations and facilitate a positive relationship with you.
Adequate Resources: Determining that the potential source has enough resources to take on the work proposed in the contract is an extremely important factor, as this could make or break the relationship.
Time/Capacity: The potential source needs to have the time and capacity to add this project to their repertoire. Some vendors can take on more than they can handle and will not communicate that up front.
Business Size: Whether the business is a smaller company or a larger company, it is important to take this into account when evaluating as a potential source. It may negate confidence in other areas of evaluation.
References/Reviews: Checking over references and customer feedback regarding the potential source’s previous work is one of the best ways to acquire firsthand knowledge of how they operate.
Previous Work: One of the best indicators of technical capabilities and quality can be determined through the assessment of the source’s past work and case studies. The more organic the material, the better, as potential candidates love to put their top 5 in the spotlight and avoid their hundreds of failures.
Intellectual Property Rights: Depending on the nature of the project, it is important to establish who has property rights in the processes that will be implemented and in the products that will be created. Does the potential source declare these rights over the work they perform?
Proprietary Rights: Like intellectual property rights, it is important to also establish who will retain ownership and control. Does the potential source declare the ability to make all decisions over the work they complete for the project?
Warranty: Depending on the nature of the project, it is important for the potential source to express any type of warranty or guarantee they offer on their work, as well as the time it is good for.
Level of Risk: Based on previously assessed criteria, a potential level of risk should be decided around working with the potential source. If they are proving to be too volatile, they shouldn’t be your first choice, whether you golf with the manager on the weekends or not.
Source Selection Criteria: Make it Agile
Now, don't throw the previous list out the window because it didn’t come packaged neatly with an Agile label. General is our starting point. And if you only use that list to assess potential candidates, you will still waste less time hoping for the best. But as Agile project managers, it is best practice to go one step further. We must address a few Agile-specific details to create the complete picture of working with our source.
Image: Tima Miroshnichenko | Reference: [5]
Listed below are additional factors to consider around Agile philosophies. Don’t be alarmed if you see a few similarities to our general list. The intent is that you formulate your own list with the guidance of these options [3].
Agile Experience: The potential source should have previous experience working with Agile Methodology. You should request certifications that indicate training specifically in Agile, such as Certified Scrum Master (CSM). Previous work or case studies can also indicate experience.
Scalability and Adaptability: Is your potential source ready to be agile? Learning whether they can scale their operation based on project needs and evaluating their ability to adapt as any changes arise is crucial to meeting your team’s needs.
Communication Skills: Ensuring there are no language barriers is ideal to facilitating communication with ease. Noting the responsiveness of the potential source is also a key indicator they will be a good asset in communicating throughout the project.
Compatible Culture: The working relationship is much easier if your teams see eye-to-eye on work ethic, values, hours, and holidays. It also helps if they express an understanding of cultural nuances, which is useful for international clients.
Physical Location: An actual or virtual tour of the physical location is a strong introduction to the team and provides insight into other areas of evaluation criteria, such as work area and infrastructure.
A Trial Project: If there is time to assess the potential source with a smaller project, before signing them for a larger project, this is a good way to evaluate without investing too much.
Reporting and Transparency: To keep your team informed, the potential source should have a process established for reporting and communicating. It is also helpful to know if they use industry-standard tools such as Jira, Slack, or Trello to collaborate.
Cost and Contract: Each cost is discussed and listed within the contract. It is important to determine if there are any unknown costs or potential fees. The contract should explain a clear understanding of project scope, timeline, and any required legalese.
Confidentiality and Security: In working with sensitive information and expensive software, ensuring the appropriate safeguards and security measures are in place is important before undertaking a project together. Data should be stored properly, securely, and non-disclosure agreements should be signed if required.
Support and Maintenance: Offering support after initial implementation is helpful to note during your evaluations. Agile projects often require improvements to be made throughout various sprints.
Employee Training: A good indicator as to whether your potential source is a good collaborator is if they invest in the skills of their employees. It is a positive sign to discover that the company encourages improvement and ensures their team is always current on best practices.
Tools and Infrastructure: Understanding the tools that the potential source uses to communicate and manage provides insight to their day-to-day operations. It is also ideal to know if the potential source has an infrastructure that will handle the work required.
Follows Laws: It is important to verify if the potential source follows local and international laws. This is especially significant if the source is in another country.
Final Thoughts
There are almost too many factors that go into finding the perfect dancing partner for a project. This is probably why we are inherently terrible at it. Project managers try to save where they can. Remember, saving is one of the reasons we even consider outsourcing.
Perhaps we rush through the source selection process because we already have high expectations for everyone in our industry. After all, how did they get this far?
Hear us out.
You can be an Agile project manager and also define selection source criteria. This is your best way to prove why a source won’t work and can save your team many headaches.
Considering Agile has a distinct way of operating, you must focus on choosing partners that ultimately strengthens operations rather than hinders them. Don’t set up your sources to fail and don’t put your team’s reputation on the line because of poor planning. Take our advice. You will enjoy finding the right partner as opposed to reworking aspects of the project.
References
[1] K. Schwalbe, et al, Information Technology Project Management, 9th ed., Boston, MA, USA: Cengage, 2019. [Online]. Available: https://ebooks.cenreader.com/#!/reader/b2aef31a-bf2f-4c23-a0fa-63a64a662287/page/758a39896cdf87baf7a6aadddffd418f (Accessed April 3, 2024).
[2] Grist. “Source Selection Criteria.” Grist Project Management. December 11, 2023. https://www.gristprojectmanagement.us/guide/source-selection-criteria.html (Accessed April 5, 2024).
[3]B. Pham. “Unlocking the Power of Agile Outsourcing in Software Development.” Saigon Technology. September 21, 2023. https://saigontechnology.com/blog/agile-outsourcing (Accessed April 5, 2024).
[4] J. Schnobrich. Image provided by Unsplash. https://unsplash.com/photos/three-person-pointing-the-silver-laptop-computer-2FPjlAyMQTA
[5] T. Miroshnichenko. Image provided by Pexels. https://www.pexels.com/photo/man-reading-a-contract-5439449/
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