by Albert Lee

How to Choose the Right IT Outsourcing Provider

Nov 17, 20086 mins

Selecting an outsourcing provider can be difficult, but these project management tips will help you pick the right vendor to meet your current and future needs, and ensure the success of your project.

So, you have decided to outsource. The journey to that decision was no doubt a difficult one, but now comes the hardest part: the road to selecting an outsourcing partner. Take the wrong path, and your project will be destined for failure, but the right one could lead you to a valuable outsourcing relationship for years to come. Here are five steps that should be on your roadmap to choosing your outsourcing partner.

Business 101: What is your mission statement?

It is surprising how many IT projects are kicked off these days without a basic charter or mission statement. Before you enter into any project, it is important to identify your goals and your success criteria up front. This critical planning step ensures you stay focused on what you hope to get out of an outsourcing relationship.

Get buy-in from everyone.

Now that you have a plan, it is time to put on your sales hat and sell the idea internally. To many executives, outsourcing remains a dirty word. No matter how much money you think you will save, or how much additional revenue your project could generate, your project is doomed to fail if your executive team is not on-board from day one. Be prepared to answer difficult questions on how your plan will benefit the organization, including the C-suite, and then be prepared to address these same concerns with the employees. Proceed with caution—the success of your outsourcing project requires participation from everyone in your organization. Your organization needs to be both physically and emotionally prepared before you attempt to engage an outsourcing partner.

Do your research, and make your first phone calls.

Now that your business is on-board, it is time to make those first phone calls to potential outsourcing partners. Try not to think of these as sales calls. Treat these calls as job interviews. Think of the person on the other end of the phone as someone who is applying for a job at your company.

Do they know your industry? Do they have clients similar in size to yours? How long have they been in business? Do they understand your project mission, and are they prepared to work with you to achieve your success criteria?

A successful outsourcing partnership is built on trust. Would you hire the person you are talking to? If not, best move on.

Be ready to go native!

So you have found a few folks you like. It is time to do your due diligence. Remember, the partner you choose is in a different country. In order to use them effectively as an extension of your staff, you should spend the time to better understand what it is like to be an employee in a different country. Go native!

Cultural differences are the obvious place to start. National holidays, religious observances and standard work hours vary significantly from country to country. Look for areas where these cultural differences could significantly impact your business. For instance, you probably should not partner with an outsourcing firm that celebrates a major national holiday during your busiest time of year.

Language is another barrier. How many people at your prospective outsourcing partner speak your language? Can they only communicate socially, or can they communicate at the level and pace that your business demands?

Understanding the technology infrastructure of the vendor and the country that the business resides is also extremely important. While high speed Internet access is practically expected in business in the United States, many outsourcing partners do not enjoy the same levels of connectivity. Can your offshore business center operate effectively as an extension of your business with an unreliable Internet connection? What is your tolerance for being “off-line”?

Finally, take a closer look at the business culture. In particular, pay close attention to their business process management. If they are CMMI rated, are they only capable of engaging with CMMI Level 5 companies? Will your business partner be able to integrate seamlessly into your existing business processes? Will your outsourcing partner really work as an extension of your business, and will they feel the same sense of ownership in the projects as your employees do?

Check those references. Then check them again.

Think you have found the right partner? Well, now it is time to check references. Seek out companies who have been working with your prospective outsourcing vendor for several years. Take the time to hear their successes and their failures. Checking a reference with a client that is still in the honeymoon period will give you an incomplete picture. A successful outsourcing partner relationship will be one that you live with for many years.

However, don’t just stop there—do your own research as well! This is where your business network and social networking becomes extremely important. Services like LinkedIn are invaluable tools for soliciting information from a wide network about potential business partners.

Review your mission statement one last time.

Before you sign those contracts, be sure to revisit your project charter again. Did your goals change? Are you still tracking true against your goals? Make absolutely sure your outsourcing partner is aware of your goals, and be confident that they will help you achieve your goals.

The process of selecting an outsourcing partner should not be underestimated. My own journey in 2007 started with a simple list of five vendors and a simple project charter. Over the weeks and months, I eliminated all five of those vendors, and started over several times. I spent weeks researching the business cultures of India, Eastern Europe, and Southeast Asia. Dozens of reference checks went by before we selected Luxoft to extend our software engineering staff. Our methodical approach to vendor selection has helped us find an outsourcing partner that is tightly aligned with the core values of New York Media, and provides us with engineering talent that integrates well with our core on-shore talent.

While the vendors you select will inevitably be different depending on your outsourcing needs, be sure to focus on someone you can partner with. Do not just seek out simple vendor-client relationships. The decision to engage in outsourcing is a decision that effectively extends the availability and man-power of your organization. Your outsourcing partner should work as an extension of your staff. Their business should be staffed with employees that will feel the same sense of pride and ownership in their deliverables that your own employees do. Setting your expectations any lower and you set yourself up to fail.

Albert C. Lee is the executive director of Information Technology at New York Media. He has more than 15 years of professional experience in multiple technology domains including software engineering best practices, server administration, data center migrations, enterprise relocation and full product lifecycle project management. In his role as Executive Director of Information Technology at New York Media, Albert leads a team of more than 30 full-time managers, engineers, administrators, project managers, technicians and contractors.