How fact-based vendor management saves you money

Outsourcing your software development can be risky, particularly if you rely on vendor anecdotes. Or analyses about complexity. Or anecdotes about effort extended. Or anecdotes about team turnover. (Sound familiar?)

Without transparency and facts, vendors have more power than they should in the relationship. That can cost your organization a lot of money.

Vendors make all sorts of unverifiable claims. For example, they can insist that your complex code takes them longer than planned to develop and maintain. But what if they’re responsible for introducing that code complexity? Information like that could alter the path of contract extensions in your favor. Imagine going into vendor negotiations with critical data points like these:

• In the last year, developer productivity dropped by 13% yet costs only dropped by 10%.
• The vendor’s team overseas was responsible for 70% of the productivity drop. A lack of developer focus and team churn caused 60% of that drop.
• Code complexity increased by 10%. The vendor was responsible for 90% of that complexity increase.
• The vendor only documented 17% of what they added to the code over the last year.
• The vendor put in 80% of the effort they said they would.
• The project was late because the developer tried to do 60% of the work in the last two weeks of the three-month project (see graph below).

Having those kinds of data points is a game changer. It lets you tip the negotiating scale back in your favor. It lets you choose the right vendor using historical benchmarking. That means you can negotiate with facts in your corner. Call vendors out on their lack of documentation, increases in complexity insufficient testing, or knowledge loss risks due to staff turnover.

Show the vendor what team churn cost the project in productivity. Then offer them a one-year contract requiring them to lower code complexity by 25% and increase documentation by 40% if they want to renew at 85% of the current run rate.

Regain your bargaining power and hold onto more of your money. That’s the power of Seerene.