Outsourcing Advisors: 6 Tips for Selecting the Right One
Hiring the best advisor for your business needs may be the single most important decision you make during the outsourcing process. Here are six tips for making a smart choice.
CIO — When it's time to outsource, selecting the right outsourcing advisor may be the single most important decision you make—one that sets up your future relationship with an IT services provider for success or failure. Given that IT outsourcing transactions are complex and vendors are savvy at setting them up to their advantage, solid sourcing advice from a third party can help to level the inherently uneven playing field, particularly for less experienced IT services buyers.
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But deciding which sourcing advisor is right for you is trickier than it may seem. All sourcing advisors are not equal. A big name firm may not give you the attention you need. A start-up may not have the depth of experience you require.
"There has never been as great a need for outsourcing advice as there is today, and there has never been such a plethora of advisors competing to give their advice," says Phil Fersht, former AMR (AMR) analyst and author of the outsourcing blog Horse for Sources. (Fersht now works for vendor Cognizant Technology Solutions. (CTSH)) "Whether you are a highly-sophisticated enterprise with your outsourcing experience or a complete novice, you will most likely have to engage a third party at some stage during the outsourcing lifecycle, whether it's simply to administer and negotiate a complex contract or to hold your hand through the entire evaluation process."
There are some general qualities that make for a good outsourcing guide. "The very best advisors are not only guardians of the clients' interests, but are also excellent facilitators, who understand both sides' perspectives, risks and interests, and can work creatively and constructively to find solutions that permit both sides to succeed," says George Kimball, an outsourcing attorney in the San Diego office of Baker and McKenzie.
Here are six tips to help you choose your outsourcing consultants wisely.
1. Know your goals. "Make sure you define your basic sourcing strategy before selecting the sourcing advisor," says Richard Matlus, research advisor for Gartner IT Services and Sourcing. For example, is your impetus for outsourcing to reduce costs? If so, adds Matlus, select an advisor that will help you achieve that goal. Some advisors excel at holding vendors' feet to the fire on prices, while others specialize in other areas.
2. Bigger is not always better. Outsourcing advisors come in all shapes and sizes, from the big name firms that charge correspondingly high fees to independent individuals with lower hourly rates.
"When dealing with third party advisors, you usually get what you pay for," says Fersht. "However, we have seen situations where enterprises have paid top-dollar for third-rate advice and others where customers received great service from one of the smaller, cheaper firms."
