Cheap is Expensive, Expensive is Expensive as well!

If you are planning to outsource a software project, you have a lot of choices of software vendors. Costing-wise, you may be surprised with how varied the bids that you receive are. Here are some pointers to keep in mind about the cheapest to the most expensive bids:

The Lowest Cost Option

CC image courtesy of Joanna Bourne on Flickr

With the economies around the world facing many challenges, the money has become dearer. Everyone is looking for ways to save money. Especially alluring is the prospect to save the money that gets spent on software development. Time and again we come across the advice “Cheap is expensive”, but at times the cost savings are too good to pass and we just sign up with the low cost bidder. A software project team that is cash-strapped is bound to cut corners which may hurt the project in a big way. Most of the times, the team members may not have even satisfactory skill. What is worse, the problem may manifest itself at a much later stage. There is no dearth of failed projects in the software world.

The Highest Cost Option

CC image courtesy of Martin Cathrae on Flickr

While cheap is expensive, expensive is expensive, of course. Just to avoid going to the cheapest provider there is no point in throwing money on a software maker just because they are expensive. Some times, even the expensive team may not be well-suited for the job at hand, or some other times they may be just expensive without a proportional skill, but let’s not ponder about these situations for now and assume that the expensive people actually possess the skills to show for the higher price they demand. In most projects, 80% of the work is easy or rudimentary, and using the highly skilled people for that will be an overkill and does not make business sense.

I have worked in software development teams where the minimum experience of a team member was 12 years. While the project went very smoothly and the defect count was low, but just because of the team’s outgo it was not cost effective.

The Middle Path

CC image courtesy Earthsea Pottery on Flickr

The best vendor the one that gives you a most value for money, and it is often the middle path — not one of the extremes above. Outsourcing the work to an offshore team is a good option. The software team needs to have at least one good person who understands the technology and business requirements well, and be professional enough not to cut corners where it could hurt the project. If a vendors works with you on how some functionality could be implemented to maximize the value that the user derives from it, or suggests a cost effective alternative, then that’s a very good sign. At the same time, to keep the costs low, the team should have some junior team members who can take care of rudimentary tasks.

What is your experience? Do you agree? Please give your comments.


Cheap is Expensive, Expensive is Expensive as well!

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