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Creating a Structured IT Outsourcing Strategy

by: Sarah Joson

Wednesday, July 8, 2015 |

Large mega outsourcing deals are slowly losing traction this year as they are predicted to fail. Moreover, large deals take a lot of time before results are seen, and are very dependent on a company’s financial resources. A post at Channelworld.in discusses the key strategies CIOs are taking to have risk-free IT outsourcing projects.

Some experts have observed that IT organizations have divided large IT projects into smaller tasks. They were also seen teaming up with multiple, niche providers to address the needs of each process.

Andrew Alpert, principal with business optimization and outsourcing consultancy Pace Harmon, cited several reasons why dealing with a single provider is not the best decision for a long-term IT outsourcing project. First, he said a project may require a specific skill not offered by a single provider. Second, they may have certain weaknesses that can’t be addressed immediately but show up throughout the course of the contract. For instance, they are experts in development and testing services but lack expertise in management. He added that getting tied up with a single IT service provider decreases a client’s ability to negotiate costs, maintain quality, and ensure accountability.

However, before you dice your projects up into little pieces and contact different suppliers, you must first take into account several factors:

Is multisourcing really feasible?
Organizations must analyze and categorize their processes first before even considering multisourcing. For some of the seasoned CIOs who have dealt with outsourcing before, they know that having numerous providers can also be a problem. They believe that certain specialized processes can be assigned to a single service vendor. For example, software-as-a-service platforms which require minimal attention and timeframe as these have a short testing lifecycle can be outsourced to a single provider. These are easy to manage and execute.

Do not forget about the imminent risks.
Projects don’t always go smoothly. Before you even ink a deal with your provider or providers, list down all the possible scenarios that could disrupt your operation. If a client has decided on working with a single provider, then it would be best to limit the timeframe and specify the scope of the entire project in detail.

It will give buyers more control over the budget, staffing requirements, performance structure, resources, and output in a concrete agreement. In a nutshell, whatever is written in the contract must be carried out by the provider to the T, and if they fail to reach the goals, they can utilize the sanctions which should also be included in the contract.

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