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Top 10 considerations when selecting an outsourced partner

May 28, 2009 • Features

Jaroslav_Cerny2.jpgOutsourcing is gaining popularity, largely due to its effective ‘pay as you go’ model. This is especially appealing in light of the current global economic downturn with ICT managers having to keep tight control of their budgets.
The outsourcing model offers access to skills, resources and experience that would not otherwise be available to many organisations’ because of the financial outlay that is required in building these specialised proficiencies in-house. However, negotiating the minefield of outsourcing providers and outsourced offerings – and selecting the one that will work best with your organisation – can be challenging.
Taking certain key criteria into consideration when assessing an outsourced
service can be advantageous. These include a review of the following:

1. Appropriately skilled technical staff
One of the fundamentals in selecting your outsourced partner is to ensure that all technical staff are appropriately certified according to their level of experience and position. For example, when outsourcing a relational database or Operating System (OS) component of the business, varied levels
of skills are required. A trainee engineer may not have obtained vendor certification but it is expected that Senior and Principal Consultants will have these certifications. Outsourcing to a partner with a varied level of staffing that can be matched to the appropriate task, ensures that your business has access to skilled staff without a significant capital outlay.
This also provides ‘peace of mind’ as you can rest assured that the staff working on your project are competent.

2. Multi-platform, multi operating system support
Not all businesses use the same operating systems (OS), and multiple types of OS’ are often used simultaneously. It is therefore important for an outsourced partner to have a good working knowledge of multiple OS’, including the variety of Unix variants, Windows and the various versions of
Linux, including Red Hat, Susi and Unbreakable Linux. If working in a database environment for example, it is necessary for the outsourced partnerto be knowledgeable regarding the different types of relational databases, including Oracle, DB2, Sybase, SQL and MySQL. The benefit of the outsourced
company having a broader knowledge base is that it can significantly reduce implementation time and support various platforms.

3. Pre-define the services offered, and how they are delivered
Service Level Agreements (SLAs) are fairly standard, and you should insist on one that includes clearly laid out details, such as mean-time-to-respond, mean-time-to-repair and escalation procedures all the way to the top level.
This should be combined with an Operations Level Agreement, (OLA) – a contract that specifies how the SLA is executed; something which is often not included as a standard procedure. This should be done before engagement between the client and the outsourcer. Clear roles of responsibility should
be established and measurables put in place. In addition, rates for work required over and above the scope of the contract should be agreed upon scaling from Junior Engineers up to Principal Consultants, depending on the level of expertise required. This eliminates nasty surprises down the line
and prevents your outsource partner from holding you to ransom at a future date.

4. In-house developed, pro-active monitoring and alerting tools
Industry standard tools are often recommended with relational database or OS outsource contracts, but they usually come with a hefty price tag which is transferred onto the client. During times when budgets are lean, an in-house developed solution offered as part of the entire package (a value-add), can deliver the same basic functionality of industry standard tools without the severe dent to your budget. However it is important to bear in mind that a simple monitoring tool might not feature the same ‘bells and whistles’ as an industry standard tool such as a sophisticated graphical user interface
(GUI).

5. Implementation of industry standards and best practices
The implementation process should be standardised and clearly defined from the beginning. This forms part of the ‘value-add’ consulting service that an outsourced partner should provide. In fact, advising the client of what must be standardised, implementation Best Practices and the benefits thereof, is
often regarded as a critical mini-project. As different industries have different Best Practice standards, it is important for your outsourcer to have a broad knowledge base from which to work. Best Practice is not a one size fits all solution, and service delivery must be tailored to suit the
needs of the client and their industry, using Best Practice and Industry Standards that comply with ITIL and ISO9000 standards.

6. Service Level Management
Your outsourced partner should include a Service Delivery Manager to monitor the service delivery of the project as well as the quality thereof. This role or resource is mutually beneficial, as the outsourcer can feed this information into its CRM system and, from the customer’s point of view,
grievances can be raised and escalated during implementation so they can be quickly and painlessly dealt with. A good outsource partner will conduct Service-Surveys with the customer on a regular basis to establish service levels and customer satisfaction. This allows the outsourced partner to
monitor and improve their service and be aware of future project requirements.

7. Regular management meetings
Regular on-site management meetings will allow the outsourced partner to communicate the progress and completion of project ‘milestones’ or simply let the customer know, in person, exactly how things are progressing. This creates a feedback loop and ensures that by the time the contract/project
nears completion, both parties are one hundred percent happy with the work done. It also fosters open communication lines between the outsourced partner and client which results in trust.

8. Strategic partnerships with software vendors
Make sure your outsourcer has strategic partnerships with relevant software vendors. This ensures that the company remains up to date with all of the latest developments in the particular technology related to the project or for purposes of ongoing contractual support. In addition, the organisation
can benefit from the preferential pricing that vendors usually offer their partners. Another benefit is the regular training (at preferential rates) that such partnerships offer, including access to the latest versions of software, information, developments, conferences etc.

9. Comprehensive documentation
The client must insist on comprehensive documentation of everything that pertains to the project or ongoing support. This knowledge base delivers transparency into the project so that if a key employee is away on annual or sick leave, they can be replaced with minimum disruption. In addition, this
knowledge base allows the customer to continue on their own (if required) once the project is complete, whilst having full access to implementation details and issues. It also allows the organisation to switch to another outsourced partner if it is unhappy with any stage of the implementation.
The new partner can pick up where the previous one left off relatively easily and quickly identify the daily, weekly and monthly tasks associated with the contract. This documentation must be compiled inline with ITIL and ISO9000 standards and be reviewed on a quarterly basis and should form part
of the SLA.

10. Achieving a significant ROI

While engaging an outsourced partner involves a cost, your partner should deliver benefits to your organisation that outweigh this charge, saving you money in the long-term and delivering a significant Return on Investment (ROI). For example, if an organisation experiences downtime that costs the
company R1m, the outsourced organisation could provide a service that minimises or completely eliminates downtime at the cost of R600 000, paying for the exercise and further improving the bottom line.

Outsourcing can be of great benefit during times when budgets are more important than ever. If you pick an unsuitable partner you could end up throwing your money away without realising the true benefits of outsourcing ICT. But if your partner is the right ‘fit’ for your organisation, you will
gain access to a wealth of skills on demand at a significantly lower cost of hiring them in-house with SLAs and OLAs that stipulate service levels whilst eliminating the associated costs of additional ‘head count’.

When selecting an outsourced partner, ensure they have a strong client base and good track-record in retaining annuity contracts for a minimum of five years. In addition, obtain contact details from the outsourced company for annuity contract and project references that have well defined objectives
and goals. Establishing the ability of the outsourcer to listen, understand and collaboratively work on defining metrics, goes a long way in minimising misunderstandings before any contracts are signed. It is vital to select one that brings value to your organisation, and delivers on all of the service promises it makes.

Jaroslav Cerny, MD at RDB Consulting

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