How Do We Handle Disagreements or Conflicts with Our Outsourcing Partner?

Conflict. It’s almost inevitable when collaborating with an outsourcing partner. Yet, it doesn’t have to spell disaster. In fact, when handled well, disagreements can strengthen partnerships, refine processes, and lead to better results. In this post, we’ll explore how to navigate conflicts intelligently, balancing clarity with tact, and trust with accountability.

Whether you’re outsourcing software development or any other service, the stakes are high. Deadlines are looming. Expectations are sky-high. And resources are finite. Disagreements can’t be ignored, but they can certainly be managed.

Let us get started.

Set Expectations Clearly - From Day One

Most conflicts stem from misaligned expectations. You might think, “But we agreed on everything at the start!” True. But did you?

Expectations aren’t just about deliverables and timelines. They’re about communication styles, decision-making processes, and even definitions of quality. Here are some steps to get this right:

Define "Done"

A feature isn’t “finished” until everyone agrees it is. For you, it might mean passing rigorous QA testing. For your outsourcing partner, it could mean “it compiles without errors.” Misalignment here leads to frustration on both sides.

Create a shared “Definition of Done” document. This should cover:

Regularly revisit this document. Project scope often evolves, and your “Done” criteria might too.

Align Communication Protocols

How often will you meet? What happens if a critical issue arises on a weekend? These questions need answers.

Set these expectations upfront:

• Meeting cadence: Weekly check-ins or daily standups?
• Escalation pathways: Who to contact for critical issues and within what timeframe?
• Response times: Define acceptable response times for emails, chats, or tickets.

Clarity here prevents friction later.

Focus on the Problem, Not the Person

When conflicts arise, emotions can run high. It’s easy to point fingers or assign blame. But the best way forward? Focus on the issue at hand.

Stick to Facts, Not Opinions

Imagine this:

• You say: “Your team missed the sprint deadline again. This is unacceptable.”
• They hear: “You’re bad at your job.”

Now contrast that with:

• “The sprint deadline wasn’t met. Can we explore what went wrong and how we can prevent this in future?”

The difference is stark. Stick to the facts, and ask open-ended questions. This approach invites collaboration, not confrontation.

Create a Shared Problem Statement

Instead of “your problem” or “my problem,” frame it as “our challenge.” For example:

• “The module isn’t integrating well with our legacy system.”
• “The velocity dropped by 20% last sprint, and we’re behind schedule.”

This subtle shift fosters a sense of shared ownership. And when both sides own the problem, they’re likelier to own the solution too.

Use Structured Problem-Solving

Conflict resolution isn’t about “winning” the argument. It’s about finding a workable solution. This requires structure.

Root Cause Analysis

The first solution isn’t always the best. Dig deeper. Why did the issue occur? Use tools like the 5 Whys:

1. Why was the deployment delayed? The code failed QA.
2. Why did it fail QA? There were untested edge cases.
3. Why weren’t those tested? The scenarios weren’t in the user stories.
4. Why weren’t they in the user stories? They weren’t discussed during backlog grooming.
5. Why weren’t they discussed? The team wasn’t clear on stakeholder expectations.

Now you’re solving the right problem: clarifying stakeholder expectations during backlog grooming.

Collaborative Brainstorming

When proposing solutions, involve the partner. A shared sense of investment increases commitment. For example:

• Instead of: “You need to add more developers to meet deadlines.”
• Say: “Would adding resources or extending the timeline help?”

The former dictates. The latter collaborates.

Build Trust During "Peacetime"

Trust is like a bank account. Every positive interaction adds to the balance. Every conflict withdraws from it. If you build enough trust during peacetime, you’ll have reserves to draw on during conflict.

Celebrate Wins Publicly

Did the partner’s team deliver a tricky module ahead of schedule? Acknowledge it. Share your appreciation in team-wide meetings or emails. Positive reinforcement isn’t just for employees; it works wonders in partnerships too.

Be Transparent About Challenges

Transparency fosters trust. If your in-house team caused a delay, own up to it. Don’t let your partner shoulder the blame unfairly. Transparency encourages reciprocity—they’ll be more open about their own challenges too.

Know When to Escalate

Not all conflicts can be resolved at the working level. Sometimes, you need to escalate. But escalation isn’t a failure. It’s a step towards resolution.

Define Escalation Protocols

Set up clear guidelines for escalation:

• First Level: Project Managers
• Second Level: Account Managers or Department Heads
• Final Level: CEOs or senior leadership

Each level should have specific criteria for when to step in. For instance:

• Project Managers handle timeline slippages.
• Account Managers address repeated miscommunication or budget overruns.
• CEOs resolve fundamental issues threatening the partnership.

Escalate Early, Not Late

Don’t wait until small issues snowball into unmanageable crises. If weekly meetings don’t resolve a problem, escalate it within a week or two. Timely escalation saves relationships.

Measure the Health of the Partnership

How do you know if your relationship with the outsourcing partner is healthy? Don’t rely on gut feeling. Measure it.

KPIs for Relationship Health

Track these metrics:

• Communication Responsiveness: Average response time for emails or queries.
• Deliverable Accuracy: Percentage of deliverables meeting requirements on the first attempt.
• Dispute Resolution Time: Average time to resolve conflicts.
• Team Turnover: High turnover in their team could indicate deeper issues.

Regularly review these metrics. If something is off, address it proactively.

Conduct Periodic Reviews

Schedule quarterly partnership reviews. Discuss:

• What’s working well?
• What needs improvement?
• What goals should we set for the next quarter?

These reviews keep both sides aligned and committed.

Learn to Walk Away (When Necessary)

Let’s be real. Not all partnerships work out. Knowing when to part ways is as important as knowing how to resolve conflicts.

Red Flags

Consider ending the partnership if:

• Deadlines are consistently missed without valid reasons.
• Communication is opaque or evasive.
• The partner isn’t willing to address recurring issues.

Exit Gracefully

An abrupt exit can harm reputations. Instead:

1. Provide clear reasons for ending the partnership.
2. Allow sufficient notice for knowledge transfer and transition.
3. Leave the door open for future collaboration, if possible.

Conflicts with outsourcing partners aren’t a sign of failure. They’re a test of how well you can navigate challenges together. By setting clear expectations, focusing on shared solutions, and building trust, you can turn conflicts into opportunities.

Remember, great partnerships aren’t built on the absence of disagreements. They’re built on the ability to resolve them with respect, transparency, and collaboration.

At 1985, we’ve seen firsthand how conflicts, when managed well, lead to stronger relationships and better outcomes. So the next time you face a disagreement with your outsourcing partner, don’t panic. Lean into the process. The results might surprise you.