When it comes to global outsourcing, particularly from India, the risks \u2014 and the stakes \u2014 are higher than ever. Global sourcing vendors \n\nare being given more responsibility from a technical and business perspective, and they are being given greater access to internal systems and \n\ncustomers. At the same time, the increasingly volatile, inconsistent, and expensive labor pool in India makes this increased trust much riskier. \n\nThe Vendor Management Bible\nABC: An Introduction to Vendor ManagementGiven these realities, it is even more important today to continuously evaluate and monitor vendor performance. Even as many mature sourcing \n\nand vendor management (SVM) groups focus on advanced topics like establishing new governance models and driving innovation, conversations \n\nwith Forrester's clients reveal that it's all too easy to neglect the seemingly mundane risks related to employee attrition, questionable vendor viability, \n\nand the risks associated with the increasingly popular managed services engagement model. SVM executives and their internal clients need to \n\nremember the basics when evaluating and managing global IT services and outsourcing vendors. To mitigate risk and maintain value from vendor \n\nrelationships, Forrester recommends that SVM executives look to:Ensure Quality Processes and Standards are Behind Vendor PromisesSome companies assume that all vendors in India (whether it is IBM, Infosys, Accenture, or other small vendors) are adhering to the same high-\n\nquality standards. This is not true. The top tier Indian vendors (e.g., Cognizant, Infosys, TCS, Wipro) ignited this industry by delivering excellence, in \n\nlarge part, by adhering to the highest possible quality coding and delivery standards. Today the most important certification, CMMI Level 5, is the \n\nstandard that all vendors use, but many vendors, particularly newer or smaller vendors, have either not bothered to get this certification or have not \n\ngotten this certification for all parts of their business. SVM executives must audit or demand proof of relevant certification (third-party certification \n\nfrom an auditor such as KPMG) for the teams and facilities that are supporting their business. The difference in consistency and quality is \n\nsubstantial.Audit Staff Resource Qualifications and CertificationsAre fresh 21- or 22-year-old graduates given a two-week training course in advanced business application programming (ABAP) before they are \n\nset loose on your SAP system? Have they been certified in SAP, either by SAP or through a rigorous internal, but externally certified, training program? \n\nThe importance of staff certifications applies to software work, but also to more critical roles. For example, clients often pay a premium for project \n\nmanagers, but many of these project managers are not project management professional (PMP)-certified or lack equivalent internal certifications. \n\nToday customers see phony CVs with inflated experience levels on a regular basis, and the clients that insist on interviewing project team members \n\nare often shocked by the discrepancy between resumes and actual qualifications. The easiest way to solve this problem is to require proof of \n\ncertification from relevant vendors or standard bodies.Evaluate a Vendor's HR and Recruiting CapabilitiesThe HR and recruiting functions at your vendor partners have never been more important. Attrition in India is skyrocketing. Your vendors need to \n\nhave state-of-the-art HR and recruiting capabilities to retain staff, keep them happy, and to employ new staff. SVM executives need to audit these \n\ncapabilities to ensure that the vendors they are selecting have made the right investments in human resources (especially if they are not in the top \n\ntier, or if there is unusually high turnover on their accounts).Look for Innovation from Vendors with Deep Vertical\/Industry ExpertiseThe only way to understand the innovations possible for a client today is to combine top-notch technology expertise with deep vertical business \n\nknowledge. Vendors that have clients concentrated in specific verticals often claim to have expertise in those same verticals, however, customers \n\ncan't take that as an indicator of vertical capability. SVM executives must evaluate the vendors' vertical experts and the vertical intellectual property in \n\norder to confirm vertical capability.Evaluate Pricing and Productivity Issues in the Context of QualityWhile customers are generally less price sensitive today than during the period of deep economic recession, they are still concerned about rates \n\nand rate stability. However, buyers need to be aware of the productivity-price trade-off. An overemphasis on rates and rate cards and a neglect of \n\nseniority metrics can result in very low rates, as well as less productive and experienced people on your projects. To gain transparency into \n\ndeveloper productivity and code quality, some companies are using tools, such as those from vendors like Cast, to evaluate the quality of externally \n\ndeveloped code and ensure that it meets certain coding and productivity standards.Beware of Managed Services Engagements Obfuscating RealityWhile managed services engagements can be extremely beneficial for clients, in this tight labor market customers must ensure that the managed \n\nservice model is not just a vehicle for hiding junior resources and\/or short-cutting parts of the software development life cycle (SDLC) in order to \n\nsave money. Service-level agreements (SLAs) have to be sophisticated enough to prevent this, and SVM executives who are concerned about their \n\nvendors' managed service maturity may still need to evaluate key project team members.Stephanie Moore is a Vice President and Principal \n\nAnalyst at Forrester Research, serving Sourcing and Vendor Management Professionals. She will be keynoting Forrester's upcoming Sourcing and Vendor Management Forum, November 7-8, in \n\nMiami.