Top Seven Tips for Essential Outsourcing Criteria

By Dipankar Das, Gaea News Network
Thursday, August 26, 2010

outsourcing Outsourcing has many aspect as an important function for an organization. It helps you get experts for your organization as well as improves efficiency of your company because you can free some of your staffs to concentrate more on core processes. As a company CEO, you have to have some criteria to make outsourcing decision.  This article is going to highlight some of the essential outsourcing criteria.

  • Background Verification: Background check is considered the top most outsourcing criteria. As a company , you should look into company’s track record of delivery, client list, client references, dealings with other companies, near-shore versus off-shore distribution of employees on project, compliance with ISO 9001 (or ISO 27001) standards, and the firm’s financial position in the market. Additionally, even though it is difficult to assess employee satisfaction, this is also a crucial part of  outsourcing criteria that is directly related to the quality of project delivery.
  • Work Statement: The statement of work is supposed to be a detailed document that should say the goals and expectations from your outsourcing partner in terms of project deliverable—what is expected and what is not. Besides these, factors like project methodology, detailed project description, user flow diagrams, scalability requirements, delivery commitments for every phases, payment schedules, performance benchmarking, and post-delivery support are also crucial outsourcing criteria for successful project delivery.
  • Support and Consultation: Operational and contractual support should be clearly mentioned in the contract. Irfan Mohammed, the vice president of IT at Sourcebits LLC, says, “The client should ensure that the vendor provides at least one to three months of support for bug fixing. Consulting services post the delivery also serves as an important criterion in the outsourcing decision. Generally, maintenance contracts do take care of many of these requirements.”  Stringent penalty clause should be included in the contract in case of failure of satisfactory support.
  • Integration: This criterion deals with the people aspect. There should be initial meeting among engineers from both sides of the project to reduce the transition time. A senior manager and an architect from the vendor side should travel to the client to understand clearly the business and technological aspect. The role of the partner and in-house team should be clearly established. The in-house team takes control when the critical data comes into the picture.
  • Architectural requirement: The contract should also clearly define the scalability of the application. The outsourcee should demonstrate the security strength so that it is compliant with the standard and the standard should be certified from a reputed body. The service provider is expected to provide real-time reports in terms of the levels of security deployed by them within their infrastructure.
  • Reviews: A discussion regarding bug tracking tools, project management tools and client communication tools being used by the vendor indicate the strength of an outsourcing partner’s processes.The result of the discussion and subsequent reviews are one of the core area of outsourcing decision. The vendor should coordinate with the project manager and quarterly business report should also help
  • Pilot Test: This is an essential criteria for every project. Pilot testing helps when a project is either too complicated, or if you are not sure about the vendor’s capability in terms of delivery. “There should be very strict timeline for the proof-of-concept (PoC).

    “The vendor’s delivery record and performance in pilot will play a part in the decision making. A mini task that resembles the main should be handed over,” says Sesanka Pemmaraju, the IT director and CISO of Sierra Atlantic.

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