10 Key Questions to Assess Application Outsourcing Maturity
More companies are seeking external IT service providers to help them innovate and optimize. The key to outsourcing success only begins with selecting the right partner, there are 10 questions that should be asked in order to assess maturity and identify weaknesses before you commit.
Mon, August 27, 2012
CIO — As more companies look to external IT service providers to help them both innovate and optimize, many are initially surprised by the amount of change required for a relationship to work successfully -- issues that extend well beyond onboarding supplemental, temporary staff. Many companies think that the key to outsourcing success is selecting the right partner, but even the best partner will disappoint you if you are not prepared and organized for an outsourcing arrangement.
In Forrester's Services Sourcing Playbook research, my colleagues and I maintain that it is critical for companies embarking on an outsourcing journey or trying to optimize their existing outsourcing relationships to ask themselves the following 10 questions in order to assess maturity and identify weaknesses. Without effective project and program management, internal process consistency, management and change control processes, and a mature vendor management function, it will be difficult -- or nearly impossible -- for organizations to work with external IT services suppliers effectively.
1. Project management track record. What percentage of your large and complex IT projects come in on time and on budget? If the percentage is high, you are ahead of the game. This suggests that you know how to scope and estimate projects, as well as manage internal customers. In an outsourced configuration, project management weakness can cost the client significant money as rework to accommodate functional requirements takes its toll.
2. Project management expertise. What percentage of your staff is PMI- certified or has equivalent certification? Strong project management is required to manage internal IT projects and resources effectively -- and becomes even more critical when you add external IT service resources and components to the mix.
3. Central program management. What percentage of IT projects are managed through a central program management office (PMO)? PMO's are critical for ensuring consistency and quality in IT organizations' programs.
4. Communication and collaboration tools. Do IT and business staff members use real-time communications, workflow, and other content-sharing tools that support distributed projects? Companies that rely on manual collaboration and code management approaches will struggle to work with an external off-site development or maintenance partner.
5. Internal process consistency. Does your organization follow a standardized development and maintenance process? If the answer is yes, it will be easier for an outsourcer to understand and accommodate your process -- even if it's sloppy or suboptimal. Challenges in outsourcing arrangements arise when the outsourcer has to learn and accommodate many different processes across a single organization -- ultimately leading to a tremendous amount of room for error and misinterpretation.