OutsourceSurvival.com

This is a brief discussion on controlling change within a live outsourcing project; in particular, ‘reducing scope’, or removing or simplifying functionality. This was a topic I was completely unfamiliar with when I first got into using freelancers. Over the course of a 12 month project, small uncontrolled compromises compounded each other, and in the end ‘broke’ many of the business objectives. Expensive rework, flawed functionality and a system that didn’t work as expected were the price I paid for inexperience.

On a smaller project, a few corners cut here and there may seem like no big deal, and sometimes they aren’t. On larger projects (starting at several $K), or projects that extend over longer periods of time (weeks/months) small reductions in functionality or simplifications of requirements can really start to have a negative impact on your finished product.

Why would you want to cut corners?
You’ve done your plan, you’ve worked out what you need, you’ve found a freelancer who has agreed to do the work. The obvious question is why would you want to cut anything out? Well from my experience, once a project (software in particular) gets underway a couple of things happen that will force your hand.

Your outsourcer for the first time actually takes a good look at your requirements. If you’re not careful, up until this point they’ll have been giving your requirements lip service. It seems totally crazy to agree to a project that isn’t understood… but that’s the way many do it. They’ll have been focussed on the sales effort, and will have committed only very limited resources to actually understanding your requirements. Now all of a sudden they’re responsible for building it and payday is guaranteed… all they need to ensure is that they can turn a profit on it.

It’s about this time that the they’ll also want to set your requirements in stone- as they seem them. They may regurgitate them and return them to you for approval. Check the details. Also, you need to be very careful with your advice or instructions during this stage, as the outsourcer will seek to have you agree to the simplest path. For example:

“We could get this done much < Insert faster/better/safer > if we do/don’t do this. Is that ok with you?”

“We know your timeline is VERY important to you, but what you’re asking is . If you want to ensure it’s on time perhaps we should leave these for now. (Note: They’re gooooonnnnnne if you agree, the conversation just shifted to future projects, whether you realised it or not!)

Yep. They’re sneaky project changes. They reduce scope and can have devious impact on other things later on, especially if you agree to them without realising it. The other changes during the opening phases of the project are ones that you initiate.

Whoops, holes in your requirements…
It turns out those requirements you developed weren’t as solid as you thought. As you start to see it coming together, you just need to make some minor adjustments and everything will be fine. No big deal, you did your homework, your requirements were pretty solid. So you ask your freelance guy, and he/she says “Absolutely!”

To your surprise they love project changes! Who would have guessed?

“But…”
If you weren’t listening closely you may not have even heard that tiny little ‘But…’. It’s in there though

They’re still playing the platitudes and pleasantries game. They’ll tell you that they want to make you ever so happy… but it’s just not possible to implement those changes without some other changes. Now the horse trading starts…

Hard Lessons in Horse Trading
In my experience this is where they’ll do one of two things. Either they’ll hit you up directly for more money or push for reduced project scope. The outsourcer’s do this negotiation regularly; they’re seasoned pros at slicing and dicing requirements. So you need to be on guard when asking for something. And remember, CHANGE is never free, and they don’t run a charity!

There is a hidden message in the choice they make though.

Option 1: Take the money
It seems to me that if they think this is going to be a profitable project anyway, they’ll ask you for more cash. They’ll say that they can make XYZ changes for $$$. Or you can leave them out and do them on a future project. It’s already a winner so this is their chance to improve profit margins.

What this means for you: Negotiate hard, you can probably extract a reasonable discount. The project is looking reasonably ‘healthy’ and well planned from the outsourcer’s perspective.

Option B: I must, I must, I must, Reduce My Bust!
If they’re feeling like they’ve bitten off more then they can chew, they’ll go for compromises in the existing project scope or agreement. What they’ll attempt to do is get bigger reductions in agreed work, so that they can ‘fit in’ your changes. This shrinks the project down, and makes it more profitable.
They’ll do this in one of 2 ways. The first approach is “Ok we can do it, but you’re going to have to give up X,Y or Z. Which one is it?” No big deal.

Set the trap…
The second approach is more sinister. I’ve been a victim of it, and it creates great leverage (for the freelancer). They just agree to the changes. Yep. No argument, nothing, just flat agreement. It leaves you thinking “Great, these guys are AWESOME!”
A week or three later, a milestone is coming up. You have a conversation with the team, who calmly inform you “I think we’ll make the milestone, but we’re really pressed because of your additional work. Don’t worry though, we’re working HARD!”

Spring the trap…
Come milestone day “Nope, we didn’t make it because of your additional work.” Now you’re in a squeeze. Your timeline is blown, and you start to feel like you’re not in control.
So they’ll come to the rescue with a choice of solutions. A deep cut to functionality/requirements… or if you wouldn’t mind, approve the milestone so that they can continue to work on the project.
If you approve the milestone, it is likely that the next milestone will be much, much worse, and the pressure to waive it ‘because of your changes’ even greater. If you’re not careful or are inexperienced, it’s at this point that it will start to spin out of control.

To get back on schedule, they’ll squeeze for more reductions. These reductions may cause you to rethink how some things should work, now that the software is rapidly deviating from your original plan.
These new changes are used against you as leverage (even though they only exist because of the compromises you made earlier to assist the freelancer), and it becomes a vicious cycle. Each time they fall behind they’ll point to your changes.

What this means to you: If they work this strategy well, you’ll be grinding your teeth all the way down, but feel powerless to stop it! Your best defence is to stick to the project plan and make everyone accountable for it- yourself included. Don’t authorise changes on the fly, no matter how trivial it may seem at the time. Use a change management process and document everything.

Even though these scenarios are a bit off topic, I hope they’re useful to help you understand the dynamic of a typical project environment. I’m not criticising freelancers; this is just what I’ve observed. It should also be noted that your decision making, responsiveness and communication methods also contribute to the vicious cycle.

Foretold is forewarned Hopefully if you find yourself in a negotiation, you’ll now see it for what it is.

Check out this discussion on implementing a simple change control process, and an example of how I got squeezed >:|