-- You should design every project to be measured. Clearly specify deliverables, how you will measure them and how the outsourcer will be paid.

-- Fixed-price contracts work well when the outsourcer has done similar jobs before. Groundbreaking projects, however, may require many changes along the way. If the outsourcer feels financially squeezed, it may take its best people off the project and quality could suffer. In that kind of project, a cost-plus payment arrangement makes more sense.

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Sharpening your outsourcing skill set

What kinds of skills are needed to manage an outsourced project?