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"
- Attack the host
- Junior dev zerg rush
- (front loading) selger høyt, leverer kvikksølv
- Use brand recognition
The Bait and Switch
- Write a killer proposal
- Push certifications
- Use brand recognition
- Front-load costs
- student-to-expert pipeline
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
- "CV Driven Development"
- Variation order
- Blame issues on client changing spec
The Emperor has clothes
- "Yes" men
- No hard questions
- Patchwork and band aids
- Less "skin in the game"
The thief in the night
- absorb business and domain knowledge
- recruit the top staff
- sell back with 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