OUtsourcing 103

Criteria for Evaluating Outsourcers

1. Commitment to Outsourcing: outsourcing is distinctive and in many ways requires expertise beyond your typical system integration services. It requires specific methods and experience.

• How long has the company been involved in the outsourcing industry?

• How is the company organization when it comes to staffing, commitment to specific customers and industries, and dedication to resolving specific problems and needs? How much is the revenue and profit percentage coming from outsourcing?

2. A Flexible and Proven Methodology/Function: There will be little time to explore your way to the paradigm of technical and management issues due to the short transition period given to the outsourcer taking over your IT business. A flexible and proven methodology will provide your outsourcer with a benchmark and the tools for them to be able to meet your specific needs.

• Do you/they have a standard methodology? Is it fully documented? To what extent is it used?
• Has it been used successfully in the past? Where has it proved unsuccessful? Why?

3. A Pathway and Access to Talent: The key to any solution is the Executive management, project management, programming and testing talent. The capability of pooling in talents and experts is very crucial. Especially if you may need off-shore designers, programmers, and testers who are usually less expensive than your conventional labor force and which are more familiar with older technologies.

• How big is the outsourcer staff in terms of: consulting staff? Analysis staff? Design staff? Programming staff? Testing staff? Documentation staff? Implementation staff? Help desk? Knowledge in terms of mainframes, customer server, telecommunications, etc.?
• Does the outsourcer have a relationship with off shore or domestic programming "factories"?
• How does the outsourcer go about with training and integration of staff?

4. Industry Knowledge and Superiority (Intellectual Capital): It is a must that the outsourcer possesses special industry knowledge especially in regulated industries or those undergoing legislative changes. For other industries, this may not really be important. As you relegate your manpower to the outsourcers, you are likely to rely on the knowledge of outsourcers as to your industry and more.

• How comprehensive is the industry knowledge and superiority of your outsourcer in terms of your current and future industry needs?
• What connections, positions do they hold with key industry organizations?

5. International Scope and Presence: Your organization should be looking for an outsourcer that will be able to handle your current and future needs and be able to coordinate in correcting problems on a global perspective. This will be particularly needed in testing interfaces on different platforms, in different languages, and between different systems world-wide.

• What experience and resources does the outsourcer have outside of the United States?
• Where are the outsourcers' key offices situated?
• What treaties is it a member to and does it abide by?

6. Organizational and Financial Staying Power: To outsource your processing information needs, which could be partially or all the way to your entire information technology function is a risky business and requires a marriage between the parties. Your organization should observe due diligence in the selection of the outsourcers making sure that the latter is right for you and has a long business life span. There are many instances where giant outsourcers have a battery of lawsuits for failure to deliver service. It is also critical that you thoroughly examine all related financial data of the outsourcers, corporate organization strategic plans, and corporate culture and history. Make sure that you see the gauge of business health of the outsourcer.

7. Customer/Referral Base: Because it's easier to trade extra services to new customers so take on original ones, an outsourcer with a powerful and different client home is possible to get the inside course on original opportunities at existing customers and therefore have improved "staying ability”. Checking the references of new customers is possibly the almost severe criteria for judging outsourcers. While nobody likes to acknowledge they selected the incorrect outsourcing spouse, there are ways to build resonance rapidly with your interviewee, and have that individual to speak about "things" that they would make differently if they had to have the outsourcing resolution, draft the outsourcing contract, or handle the outsourcing relationship differently in the future. Get this crucial data, and hear from others' mistakes and adapt your thought as needed.

8. Strategic Alliances: Successful outsourcers have almost probably engaged in important alliance and relationships with new parties (i. e. , tools establish providers, methodology companies/consultants, testing houses, catastrophe recuperation companies, particular "leading margin" integrators, etc. ). Such alliances offer a willing approach to resources and tools that maybe otherwise insufficient. Wouldn't you like these resources to be accessible to you when needed?

• What relationships and important alliances does the outsourcer have?
• To what extent have these relationships and/or tools been integrated and used by the outsourcer before?
• To what extent might they be needed and integrated into your needs?

9. Strong Commitment and Budget for Research and Development: Not only will your company change over time, but the information technology industry will change. Your outsourcing needs a powerful dedication and budget for R&D so that it may go reward of original technologies as they get accessible and rapidly decide which might be proper for your needs (e. g. RAID systems, ATM, HIPPI switches, Fiber Optic vs. Satellite Communications, original web architectures, original I-CASE tools [Integrated-Computer Assigned Software Engineering], etc. )

10. Quality of the Contract: The contract must get the proper clauses and incentives to remain to have the outsourcer do and to remain to have you do. Any article that appears biased in favour of the outsourcer, should too be written with your figure place in spot of the outsourcer. See if that makes for an impartial relationship and would be satisfactory to the outsourcer. In addition, if the outsourcer gives you a contract that is "overly better to be genuine" so it likely is! Just believe about the seniority and subsequent problems the outsourcer will get if it offers the same good advantages to hundreds of new customers. Are they better job folks? Will they remain in the industry for so long?

11. Willingness to Negotiate: The real procedure of negotiating the contract and reaching a consensus on hard alternatives, is a periscope into what living will be like with the outsourcer in the future as unexpected needs go upward. How your outsourcer handles the negotiations regarding its contract, and how ready they are to hear to your tale and needs and alter their access will suggest whether or not your relationship will be productive in the future.

12. Insurance and Litigation History: Look at your outsourcer's operation bond history and policy policies, their criteria for selecting original customers, and their story of litigation (all litigation including wins and losses and settlements. This will say you a plenty about what mistakes the outsourcer has made and whether it has learned (or is yet learning) as it continues to have its job productive.