Things To Consider When Firing Your Provider

As offshore outsourcing clients continue to feel the pain of providers' resource constraints and escalating costs in India, they are more inclined than in the past to switch providers. Although this is never an easy option, there are ways to protect your company from the worst ravages of engagement failures. This document will discuss best practices for safely saying goodbye to an underperforming provider.

PREVIOUSLY MINOR PERFORMANCES HAVE BECOME MORE SIGNIFICANT 

In the past, when Indian providers failed to perform, the impact was minimal for most companies. Today, however, failures are more expensive and more commonplace for the following reasons:

Providers are working on more critical projects. In large part due to their prior successes with Indian providers, clients have asked their offshore firms to take on more critical projects than they did in the 1990s. Failures in these projects can be painful and embarrassing to stakeholders and potentially can have a significant financial impact on the business.

Failure or underperformance is now more prevalent. As resource constraints and skyrocketing growth handicap providers, the quality of resources deployed to projects and the quality of account and project management has suffered. The result is that more projects seem to be failing or "underperforming." And clients tell Forrester that the providers appear less concerned about these failures than they did in the past.

Costs have gone up. Hourly rates have increased; overhead costs have gone up; and the dollar has been falling against the rupee. Plus, providers that sometimes paid for rework now are charging for every single hour of staff work, even if it's to redo something that wasn't done properly the first time. Previously, clients were willing to deal with substandard work because the labor rate and free rework made it acceptable, but as offshore rates and other costs climb, client tolerance for poor work has dropped dramatically.

More about this here: https://www.forrester.com/Research/Document/0,7211,46925,00.html