Offshore Governance Dos and Don’ts

David Wood, director of systems development for Otis Elevator, knows about outsourcing to India—he’s got a decade of experience under his belt (see “Inside Outsourcing in India” at www.cio.com/archive/060103). Below is Wood’s list of dos and don’ts for CIOs who want to set up a governance model for monitoring offshore vendors. See more of Wood’s comments in an online forum with CIO’s readers at www.cio.com/ask.

Governance is a critical success factor for offshore engagements.

Do:

Make sure that there is an executive sponsor for outsourcing, usually the CIO.

Assign responsibility for managing the outsourcing activity, the primary interface between the vendors and your company.

Form a steering committee made up of the CIO and key business executives—and meet regularly. Review vendor metrics, progress and strategic directions.

Make sure that project governance is also in place—typically managed by an IT lead and a business lead—for each project.

Don’t:

Assume the vendor can replace all members of your staff.

Assume that a vendor does not require both long-term and day-to-day management and direction.

Assume that vendors will always make decisions with your best interests at heart.

Assume that the vendor needs to be managed in an adversarial way. The vendor becomes an extension of your team. Govern it wisely and in many ways the way you would govern your own employees.