The Extreme Price of Choosing the Wrong Software Vendor

Looking for a software vendor can be extremely intimidating, especially finding the one that meets your needs and helps you achieve your business goals. There are n number of outsourcing companies out there but what matters the most is to find an ideal partner that understands your requirements. However, making the right choice from a list of options presented to you is not as easy as it seems. 

To ensure a successful outsourcing journey, both partner and client should be committed to sharing common goals and objectives. By selecting a reliable software vendor, you are gaining access to high-quality service and ease to maintain a long-term partnership. Although, the reasons to choose the right software vendor are never-ending. All you need is to follow certain tips that can be a lifesaver for you and your company. Let us explore more important insights related to choosing the best software vendor for you with the help of this article: 

What happens if you do not choose the Right Software Vendor

We all know that there are two different sides to the coin. The right software partner can help you streamline your project, ensure quality delivery, and empower your organization in the best way possible. But one wrong choice can put you at several risks that can restrain you from the successful delivery of your final product. Here is what happens when you choose the wrong software vendor: 

Additional Costs/ Loss of Revenue

Choosing the wrong software vendor can put you at risk in ways you can never imagine. One such important way is loss of revenue or additional costs. While outsourcing, make sure to get clarity on the overall cost associated right from initiation to final delivery of the project with the software vendor.  

You need to be clear about the overall cost of the software?” “Are there any hidden costs associated with the project”, “Will they take the additional cost to get rid of concerns such as data leakage?” and clarity related to the financial aspect of the deal. The cheapest option is not always the best but you need to overlook the things that are just more than the price. To prevent yourself from falling into the trap, do your thorough research, review case studies, and keep a constant track record before making any decision related to the software vendor. 

Delay in Software Project Delivery

“Having Clarity in your Vision is the key to Achieving your Objectives”: ~quotes Tom Steyer, Billionaire Hedge Fund Manager, and Philanthropist 

There can be multiple reasons for the delay in software project delivery such as insufficient planning, loss of key employees during project implementation, working on too many projects simultaneously, lack of communication, and so on. To avoid such reasons, you need to stick to the ground to ensure smooth completion and delivery of the project.

Time to market is the key to the customer’s heart and delivering your best quality product within desired timeline and budget will be a win-win situation for you and your target audience.  It is necessary to make a list of services you want to outsource, how you want them to be handled by the software vendor etc, how will you maintain effective communication between you and the outsourcing partner, etc. Hence, try not to dive into the project without a proper plan as staying on the same page is crucial for both client and the third-party vendor. 

Bad Reviews from Customers

Believe it or not, customer satisfaction is the key to a successful outsourcing journey. Wrong software delivery by the software vendor can not only impact the reputation of your company in a negative manner but also disrupt customer loyalty toward your product. Dissatisfaction towards a product raises an eyebrow for your software vendor not being the right choice for you. Do not compromise on the quality of the product just because you got an affordable proposal from the vendor. 

Low costs do not guarantee a high-quality product. That is why make sure to go for the software vendors who are right for your company and not just limited to reduced costs, flexibility, efficiency as well as expertise. 

Instances when the wrong software vendor had tragic effects on the client 

Here are some of the outsourcing failures that took place when organizations were not able to find reliable software vendors: 

Queensland Health and IBM

The famous outsourcing failure took place when global IT giant IBM won a $ 6 Million contract from Queensland Health Department in 2007. The objective behind this deal was to develop a better payroll financial management system. Soon after taking up the deal, IBM realized that the budget is going to be a lot more than expected. Following this, the giant ended up with an estimate of AU $27 Million by year-end. The project was stretched over the years amounting to AU $1.2 Billion and did not work out in the end. 

Royal Bank of Scotland and its IT Vendor

Another not-so-popular incident related to outsourcing is that of the Royal Bank of Scotland, which faced service disruption in 2012 due lack of efficiency by its IT vendor. After the crash of the software system, the IT vendor updated the system. But just after the update took place, RBS’s systems lost the ability to process payments for millions of its customers. The functioning of the bank was completely broken for a week causing most of their customers to transfer their funds to other banks. 

The list is not over yet. There are more such instances that had tragic effects on clients due to the selection of the wrong software vendor. 

Choosing a software vendor: Where can you go wrong? 

Not checking the vendor’s background

Conducting vendor screening is no less than a necessity to prevent you and your organization from any sort of risk or financial loss. With so many third-party vendor options available out there, you must not forget to check the background of the vendors that hold experience in your industry and will contribute to your business growth. Not following the appropriate step might present you with concerns you might not even imagine before. Also, pay attention to customer reviews for a specific software vendor to get your facts right. 

Urgency to begin 

One of the most important steps where you can go wrong is to rush the start of the project. This can either be due to the fear of not missing the dedicated delivery date of the project or just to get all the things right in the first place. Finding your potential software vendor does not mean you will get them under the pressure of delivering as early as possible. Doing so might not only impact the quality of your software product via vendor but will also leave a bad impact on the third-party service providers. Going step by step throughout your outsourcing journey will make it easy to launch your product successfully. 

Being Unclear about Price and Affordability

Holding transparency regarding the financial aspect of the deal is the most essential thing that needs to be discussed right before signing an agreement. You must have a brief understanding of the pricing and additional costs involved in the software development process. You must have clarity regarding what will be the cost factor associated with issues such as data leakage etc. As a company, the ideal approach is to go for software vendors that offer both affordability as well credibility when it comes to software development. One wrong choice can lead to massive financial loss and cost overruns. 

How to select the right vendor?

First and foremost, you need to be clear about the scope and the requirements of your project while selecting the right vendor. You need to be sure about what you are looking for and what steps you need to follow to achieve it.  

Amplifyre does it all in a click to find out the right software vendor for your company. Their unique data-driven system analyses your project requirements based on 6 key dimensions to help you find the best match from their global network of software companies. 

Click here to find out interesting details regarding the matching system.