The best way to find offshore vendors is through referrals from colleagues. If you're looking for more guidance, check out The Black Book of Outsourcing by Douglas Brown and Scott Wilson (Wiley; 2005).
The real question is how to sort through the maze of companies as vendor variety, maturity, and value grow beyond the prototypical offering.
To get a sense of where to start, look at the situation from the vendor's point of view. India today is an exceptionally competitive technology employment market, with more than 30% average annual growth since 2004. A casual review of job boards reveals tech positions with as many as 40+ vacancies each. Stories of turnover include teams of people hired away over a weekend. For one of my own clients, it has meant the team introduced prior to signing was no longer available when the deal was done.
No matter the size of the vendor, if there is no verified strategy to deliver and secure the right resources for the right time at the right risk, frustration will result. A valid place to start is by evaluating vendors of every size on organizational maturity. Important issues include ensuring resource selectivity through recruitment screening processes, understanding the training and mentorship programs that establish and control quality, and most important, retention rates and strategies. Clay Loges, CEO of Seattle-based Yodio.com, notes, Retention "is far more important to me than an impressive corporate resumé. I care how the company is going to ensure the team stays with my project."
Real experience is important, too, but hard to get at. First, it's unrealistic to think that any vendor has a full bench of seasoned consultants waiting, particularly in über-competitve India. That means the staff assigned to your project may not have had anything to do with building the success of your vendor. Validate that key project roles are staffed by veterans.
Additionally, there's nothing cultural about a salesperson over-promising. It happens every day, across cultures. But interviewing offshore vendors does add some cultural factors. Between "Yes," "No," or rather the frequent lack of "No," and the drive to simultaneously succeed yet be agreeable ... honest attempts to validate capabilities will get caught in misunderstandings.
Ask about particular capabilities and any consultant may push the envelope of accuracy. Avoid the temptation to begin by asking about the specific things you need done -- this comes last. Instead, probe what the vendor has done in depth until you hear what you need, treating the process more like a job interview. This discussion reveals true core competencies of the vendor without building a façade of capabilities. Look not only at the experience of the firm but at the track record of the key resources assigned to your project where possible. And yes, check references.
Another strategy particularly useful with specialty and mid-tier shops is to use a written skills/experience inventory. By having vendors go on record as to their past experience and current actual capacity in the skills you need, you establish a more objective benchmark for cross-comparison.
There's nothing wrong with rejecting the prototypical relationship and striving for a vendor that lifts more weight. If that's your goal, start a discussion of development methodology. The conspicuous absence or presence of a full Software Development Life Cycle replete with discussion of project management and design philosophy will be your cue as to the vendor's actual maturity level.
Finally, I strongly advocate running a short, low-budget test project. This will confirm compatibility or immediately uncover issues. Finding a new vendor after one month is indeed very painful, but much less so than re-starting a major initiative.
First and foremost, the goal in all this is to uncover your own versus the vendor's assumptions regarding the working relationship, add in knowledge about the depth and breadth of the talent bench, and how the vendor is managed. Armed with this, you're in a much better position to make a calculated bet.
Pulling It All Together
Of course, many people offshore contrary to these prescriptions and meet with success. That's why I haven't called any of my suggestions here "rules." These are guidelines and your mileage will vary … largely based on the vendor you find, the homework you do, and the investment you both make in understanding each other, your expectations, and in building a relationship of accountability and trust. That's the real point.