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IT Outsourcing Tips

by: Sarah Joson

Monday, September 2, 2013 | Outsourcing News |

DD Mishra, founder of CIO Specialist and former Executive at Vodafone, recently shared critical IT outsourcing information from his experiences in the IT industry at m.Informationweek.in.

He said businesses that carelessly dealt with IT outsourcing usually ended up facing legal, contractual, and financial challenges that jeopardized the potential of their respective operations.

In order to maximize contracts and forge better partnerships with IT service providers, he said businesses should follow these four steps:

1. Evaluate your business.
To come up with the best solution for your business, you must first evaluate your current operation, review the mistakes done in the past by identifying the risks and challenges that can reoccur, and get a feel of the business climate. Then plot the information gathered against the requirements and benefits of outsourcing.

Sometimes the in-house capability or bandwidth may not exist to conduct such due diligence. Taking help of experts can help organizations save losses from very expensive mistakes which might happen later.

There are several questions you should answer before moving on to the next step: Do you need to outsource? What would be the impact of the outsourced segment to your business? What are the risks and how can you resolve them in case they happen?

2. Look for a suitable provider.
Most clients are fixated on the costs, which becomes a problem as there are many factors that may affect the success of an outsourcing operation.

Most businesses send out Requests for Information (RFI) to chosen service providers so that they would at least have a background on the financial strength, technical capabilities, working environment, goals, and track record of the companies that could soon be their outsourcing partner. This step is commonly followed by an RFP or request for proposal, which can help business owners in narrowing down the selection.

3. The partnership begins.
By this time, both parties should have their own objectives to make the operation a success. This is one of the most critical aspects of a partnership because once the contract is set in stone, it would be harder to change as the operation is running. Clients should set their expectations and requirements, be flexible in terms of contract provisions, focus on the management instead of the output, set standards for reports and SLAs, and set more goals for the future.

4. Celebrate the integration and commencement of the operation.
This is where the fun begins. Your new outsourcing partner will be your ally as you commit in achieving one goal. First, your company adapts to the changes caused by your new outsourcing partner. The transition can affect the management style of the company, work environment, and other legal factors. It should be done in accordance with the executives so that no move is misinterpreted or communication will remain open to all segments of the company.

For cases where multiple providers are involved, collaboration is usually the best solution to keep things in order and everyone is properly informed of what’s going on.

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