In this Practical Software show, SEP group member Frank Vogelezang, Manager Pricing Office at Ordina, explains how contracts are the key to successful outsourcing. If you don’t define what is being measured for success, or what the expectations are, then you are only asking for trouble with misunderstandings. Where one person might determine an “incident” to be changing a password another might not.
Contracts can also be terrific places to create incentives to deliver great quality or beat schedules, by offering bonuses and other inducements. For example, in maintenance agreements it can be a great idea to pay bonuses for smaller number of over-all incidents rather than pay on a per-incident basis. If developers are getting paid for fewer hours worked, it is in their interests to build things right the first time and to take steps to reduce the number of support issues that could arise.
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Contracts can also be terrific places to create incentives to deliver great quality or beat schedules, by offering bonuses and other inducements. For example, in maintenance agreements it can be a great idea to pay bonuses for smaller number of over-all incidents rather than pay on a per-incident basis. If developers are getting paid for fewer hours worked, it is in their interests to build things right the first time and to take steps to reduce the number of support issues that could arise.
You can find all the Optimistic Bear shows here: Software
You can find all the Entrepreneurs Northwest shows here: Entrepreneurs Northwest
