Building Outsourcing Consensus
and Reducing Outsourcing Risk

Common Outsourcing Arrangement

Outsourcing risk is built into any outsourcing agreement. A typical arrangement is that the organization defines requirements and gives them to an outsourcing company. The outsourcing company develops the application and delivers it to the organization. The organization then tests the application to make sure it meets the requirements.

The chart below presents this common arrangement.

Common outsourced development arrangement from detailed requirements to user acceptance testing highlights the range of outsourcing risk.

Outsourcing Challenges

These arrangements present significant challenges to the organization. Requirements and testing become much more critical in delivering successful projects.

However, many organizations do not take this into consideration before they decide to outsource. Only after they start do they uncover their internal requirements and testing problems.

One way the organization uncovers problems is that outsourcing companies will not make a change just because an analyst tells them to do so. They typically make changes only from a change order - and they charge for the change.

Analysts who are used to talking directly with developers to make changes to the application (often without changing the requirements or the test cases) get a rude awakening. The organization is faced with unexpected new costs for changes.

We have seen change orders on change orders on change orders. Yes, two, three and occasionally even four levels deep. This churn that was not visible to management before outsourcing is now painfully apparent to everyone.

It quickly becomes obvious that the organization must improve its requirements and testing skills to obtain the promises of outsourcing.

Outsourcing with Building Requirements Consensus™ Methodology
and Requirements Center Tool

Using the Building Requirements Consensus™ Methodology and Requirements Center Tool is a powerful combination to address outsourcing risk. Let's revisit the common arrangement adding in the methodology and the tool.

Simulation with a good tool bookends outsourced development from detailed requirements to user acceptance testing helps reduce outsourcing risk.



Applying the Building Requirements Consensus™ Approach , the Methodology plus Requirements Center, assures that all parties involved understand and agree to what is to be built that includes an visual interactive simulation. They have clarity and have reached consensus.

The Requirements Center Tool automatically generates test scenarios and assures 100% coverage of all the use cases. Testers now have time to develop the right tests from the scenarios while the outsourcing company builds the application.

Once the application is delivered, the testers can immediately start running tests against the application. They will be delivering tangible value that is visible to other participants. This reduces the chance that the time allotted for testing will get squeezed to unacceptable levels - especially after they find a major bug.

What If the Outsourcing Company
Had Test Scenarios Upfront?

Remember that Requirement Center automatically generates test scenarios once requirements consensus is reached.

That means that the test scenarios are available
at the same time the requirements are.

Why not give the requirements along with the scenarios to the outsourcing company at the same time to reduce outsourcing risk? To benefit from this, you could include in the work order that the outsourcing company must give you its test results when they deliver the application. This guarantees that they actually use the scenarios.

You have to think this through carefully for your situation and the service level agreements in place. It is not unusual for an application to be delivered with functionality that is known not to work right yet so that testing can begin on the parts that do work. You might say something like 80% of the scenarios must be run and 85% of them must pass before an application can be delivered.

However, in our experience with multiple outsourcing companies, they will love it! Having test scenarios that conform to the requirements makes their job easier because the tests reduce the amount of requirement interpretation needed and thereby reduces ambiguity and their outsourcing risk. This is a win-win situation.

Interpretation becomes more critical when the developers are not native speakers of the language used to document requirements. Anything that reduces the need for interpretation is a big benefit - especially when outsourcing.

What About Internal Development?

You probably noticed that the benefits of using the Building Requirements Consensus™ Methodology and Requirements Center tool are the same for internal development as well as for outsourced development. You would be right!

The benefits of generating test scenarios upfront are the same no matter who does the development. However, the boundary for development is usually not so clearly defined as it is in a formal outsourcing arrangement. Nevertheless, this approach adds value to most situations.

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