The Dangers of Outsourcing Software Development

Applying Principal Agent Theory to the software consulting industry

Consulting is booming!

Principal Agent Problem

hverdagslig eksempel (bygghere)

Assymetric information

add picture of car salesman

Different interests Diverging incentives

Conflict of interest

A consultant works for two companies

Are we safe?

Title Text

  • Bullet One
  • Bullet Two
  • Bullet Three

Nefarious Patterns

What to look out for

The Infection/Parasite

  • Land and expand
  • Junior dev zerg rush 
  • (front loading) selger høyt, leverer kvikksølv
  • Bullet Three

The overly attached girl(boy)friend

  • Vendor-lock
  • Sunk cost, hard to break up
  • Creates exclusivity
    • Missing documentation
    • Sells in-house tools and solutions
    • Promotes niche or obscure technology

The leech

  • inflate cost
  • minimize effort required
  • CV Driven Development

The Emperor has clothes

  • Yes men
  • No hard questions
  • Patchwork and band aids
  • Titanic 1st class passenger

The thief in the night

  • absorb business and domain knowledge
  • recruit the best staff
  • soild back on premium

Mitigation

Strategies to protect your project

Gap
- Information
- Incentive

Information Gap

Incentive Gap

The overly attached girlfriend

  • Standard tools
  • Well-known technologies
  • Proper documentation
  • multiple contractors

Radical ideas

  • self reporting
    • voluntary public feedback 
  • Proper documentation
  • multiple contractors

Strenghten loyalty

  • Encourage mutual trust
  • Assume good intentions
  • Avoid micromanagement
  •  

Consulting

By Sebastian Roll

Consulting

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