Maarten Pors about “Hidden Costs”

We keep on developing a subject of various challenges while working with outsourcing software providers and our next exciting point is “Hidden Costs”. Maarten Pors is the first expert sharing his experience with our readers.

About the author:

Maarten Pors about “Hidden Costs” Maarten Pors is independent Project manager with vast experience in managing remote development teams in Eastern Europe (nearshoring).
You can directly contact him via:
twitter: @MaartenPors
phone: +31653786990

1) Explain, using examples, what refers to the hidden costs of project outsourcing, time & materials and dedicated teams.

When Ainstainer asked me to contribute to its blog on hidden costs of project outsourcing, I immediately remembered my first project in Eastern Europe. There were no detailed requirements, no agreement on time or nothing about team members… Just a sketch made on the back of a coaster in a bar somewhere in Eastern Europe and an hourly fee for development. No one had ever heard of Agile Software Development like Scrum, Crystal Clear or Extreme Programming.

I don’t have to tell anyone that this was not my best time. In my defence I must say, that I was only involved after all the “negotiations” finished. Not long after the development started, we noticed the first flaw in the sketch on the coaster and we changed our “requirements”, this was not a problem. We kept doing this during the first year of the development. I travelled to Eastern Europe a lot, trying to get everything and everyone to work in the same direction, which I enjoyed immensely, but didn’t have the desired effect. More money was asked from our business partner. It was too far in the project to change the partner. So we kept on working for a couple of years more in the situation, where neither we nor the business partner was happy.

2) Is it possible to foresee hidden costs before working with the executor?

You might refer the example mentioned above to hidden costs, but in my opinion there are no “hidden costs”. A good set of requirements is available and the parties know their responsibilities and, of course, an Agile project environment will ensure, that costs are clear. In contrast to the Waterfall development method, Agile ensures you, that you get a previously agreed working piece of software product, within the agreed time and against agreed costs. So in short: a good agreement about what to expect and how much must be paid, will take care of any type of unforeseen costs.

3) What can we do, if the work with a remote software development team has already begun, but the development turns out to be more expensive?

However, if the development is already on, and its way and costs seem to transcend the budget, then my advice is the following: to stop development, sit down with all the parties and discuss the situation. Where there are two parties that disagree, it is mostly two parties that are to blame. There is no difference in working with an offshore or nearshore partner, than there is working with a local partner.

Of course, the project mentioned earlier, now has a good solid agreement and the business partners work closely together to maintain the high standards, expected by the customers. However, it took a lot of time, irritation and money to come to this point. It is better to spent time and money on working over a good relationship with your business partner.

In the end, a good and solid relationship with your near-shore partner will get you a long way!

Maarten has already participated in our previous discussion on “Poor Quality of Software Product”, go and learn useful advice he gave.

Keep on with us, the most interesting things are yet to come.

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