An expert in Software Quality Assurance at the software testing company a1qa, Dmitry Tishchenko discusses a comprehensive decision-making process to use when selecting a third party service provider.
Responsible for key performance indicator optimisation and business process automation at software testing specialist a1qa, striving to make informed decisions that mitigate the risks of failure and unexpected results is a part of my everyday routine. Thus, I analyzed each case when our company is or isn’t selected as a partner in quality assurance consulting, and have observed first-hand a pattern for successful decision making that some of our prospective and existing clients have used while going through the process of selection.
And the fact is that this approach could be applied by any IT-related business, and be of assistance to Chief Information Officers across many industries, when faced with the need to choose a third-party IT vendor. Moreover, I have witnessed, when these steps are followed throughout the decision-making process, just how good the results of collaboration with a vendor can be.
Is the price right?
The first question you need to ask when evaluating a potential vendor is whether the price you are required to pay is equal the value you will get; quite simply, what is the return on investment (ROI)?
At this point in the process, it isn’t necessary to go too deeply into details such as technical expertise, product management capabilities, and so on. Assuming the question of price vs value is resolved positively, this comes later. If not, you have already saved a great deal of time and effort.
To answer the question of ROI, you need a clear understanding of what value you want to gain – for example, faster time-to-market, maintenance of business continuity, mitigating the risks of your product/service underperforming, optimisation of your IT budget, and so on.
If the ratio of price vs value is negative, you should move on to evaluating the next vendor in your shortlist. Assuming the vendor has been able to demonstrate the capability to deliver the value you are seeking at a price you are willing to pay however, the next step is to tell the potential vendor your preferred pricing model – eg fixed price, time and materials, or contract; and collaboration model – eg dedicated team, or hybrid (on-off-site mix). The majority of third-party vendors offer a full spectrum of collaboration and pricing models, so this step should be relatively easy and fast to complete.
The next stage is to drill down to the ‘middleware’, ie investigating how this vendor can deliver the value you are expecting. What level of skill and expertise do they have in your domain? Are they knowledgeable about your industry vertical and business processes? Talk to the vendor’s technical experts, to ensure the service they offer can realistically cover the existing gaps. In so doing, you will finalise your evaluation of the vendor’s communication abilities and mean response time, their commitment to deadlines, and scope of presented information.
Should the vendor successfully pass all these stages, it is time to research their maturity. How long have they been in the industry? What position do they hold in your industry niche?