Of Frogs and Wrestlers

So you found a new vendor, negotiated a perfect deal and established relationships with key players. The team starts its work and shortly you can realize the savings you’ve been looking for. A year passes faster than you could ever imagine. Reports coming from the vendor showing good compliance with the benchmarks you established. You about to give yourself a pat on the back for being such an incredible offshore manager. And just to be a good sport you take a few business users for a dinner to share with them the wonderful achievements of incredible you.

Unfortunately even before you are done with the first round of drinks the conversation takes a rather unpleasant turn. No, they are not happy with both the quality of work your offshore team has been providing and their productivity. They are afraid of changes to be done to the systems your offshore team supports, they do not submit bugs because they are afraid that fixing one new bug would re-open a dozen of old ones; they do not enter RFEs because they do not believe they would ever be delivered, and so on.

What just has happened? All that rain on your parade is coming from a completely left field. First, where were you guys for the past six months when things went so badly out of hands? Second, what happened with the great relationship with the vendor and perfect team we built in Bangalore? And more important how can you stop that from happening ever again?

Well, nothing specific to you or by any rate unusual. Please first re-read the Fundamental Laws of Outsourcing, in particular The second FLO. And whatever you do to fight the second FLO might be seriously insufficient… and you won’t notice till it’s rather serious. The reason of that invisible deterioration of services is quite simple. Many of us believe that negotiation with the vendor ends with signing the contract, the sad reality is that negotiations or a business form of wrestling never ends. Chances are is that your vendor is so good at that game that you won’t even notice that game goes on / wrestling continues.

It is in direct interest of the vendor to produce as low quality of service to as you are prepared to tolerate. The vendor knows that during the negotiations and honeymoon stage of the project you are at your full alert and paying attention to all details. As time goes by your level of attention goes down and at that time productivity of the vendor can be adjusted down, why burn fuel at excessive rate? The top notch resources are replaced by the lowest tolerable ones and new benchmark of service is established. Another six months pass by and another round of adjustments takes place with you being completely oblivious to it. The key is never to overdo it, not replace Tens with Sixes, just go from Eights to Sevens and client won’t feel a thing. The infamous boiling frog effect.

So, back to the really important question – how to prevent that from happening?

Well, not easy, but possible:

  1. Awareness – just put the picture of the frog on your desktop. Knowing what you are dealing with is a key to success, required but not sufficient though.
  2. Metrics, control and continues slightly excessive pressure. You can’t control what you can’t measure.
  3. Independent observers, audits, scheduled and surprise reviews. We are blind to our own mistakes, get a third party involved. That doesn’t have to be a contractor just someone from your team (different every time) charged with a task of unbiased review.

And do not hesitate – do it now, you might be surprised with what you’ll find out. I was.

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