By Peter Weber, President and CEO, SevenSpace (Published September 13, 2004)

In recent years, we have seen companies go through hiring blitzes, firing frenzies and organizational realignments. More companies are moving toward outsourcing to help reduce costs and headcounts while allowing them to focus on key business initiatives.

What is driving your decision to outsource? Do you need more expertise managing a specific application? Are your IT teams so focused on maintaining the status quo that they just can’t get to the development projects you need them to work on? Do you want to implement a new technology but don’t want to hire additional resources that will put a strain on your already tight budget? There are numerous reasons why outsourcing might be a good fit for your company.

The question then becomes “Where do I begin?” followed by “What do I look for in an outsourcing partner?” Keep in mind that a partner is exactly what you should be looking for – a company that takes your business needs and goals as seriously as you do. The outsourcing provider and its people are going to be an extension of your own team. Think of the selection process as an interview process – you’re looking for the right people to work with you on your projects and integrate smoothly with your own IT team.

The following is a quick checklist to help you in your selection process:

• Review what strategically is causing you to make this decision. What is the business problem you’re trying to solve? If it’s pressure from the top to save money, understand why.
• Evaluate the amount of tactical control you want over your IT environment.
• Know that the lowest price or sexiest solution is not the most important thing.
• Determine how much flexibility and scalability is required.
• Consider the range of skill sets required.
• Review your financial goals. How can you better focus on core activities?
• Consider human resources issues. Traditional outsourcing often means that people lose jobs. Explicitly state how you intend to use the outsourcer to ensure maximum internal cooperation. Communicate openly and honestly about working with potential outsourcers. Carefully select your team if there is a possibility of job loss.
• Highlight differentiators between the potential providers’ responses: send out an RFI that asks providers to consider how they would solve key business problems instead of specific activities such as “How do you monitor incident response?”
• Try to get between five and eight RFI responses back, then narrow it down to two or three prospective partners.
• Recognize that providers might compare fairly easily on paper. Visit potential providers, see their operations center, meet the people who are in operations (not only in sales) and get a good understanding of who they are. Find out exactly who will be performing the daily functions. (Will parts be subcontracted out?)
• Bring the top two or three providers in for an oral presentation or a half-day work session. Get more details on specific activities.
• Meet the actual teams who would be working with you day to day to ensure these relationships are going to work. Make sure there is a cultural fit. All resources need to be comfortable working together.
• Look at your potential outsourcing partner carefully, and ask:
  Can they satisfy your short-term and long-term needs?
  Do they understand your organization?
  Can they adapt to evolving business needs?
  How soon can transition and implementation take place?
• Ask about the contract process itself. Does this sound like a fit with your organization's needs? What about revisions in the future?

With these principles in mind, your company will ask the right questions to line up a superior outsourcing provider. And while continued management of the outsourcing partner is also a critical piece of the equation, if you’ve gotten the right team in place to start, your management job will cause you much less stress.

Peter Weber is president and CEO of SevenSpace, a strategic IT solutions provider with flexible outsourcing solutions that focus on the proactive management of applications, infrastructure, networks and security systems. Contact Peter at pweber@sevenspace.com.

Back to top
Current Digitalharboronline Columns Page