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13 best practices for IT outsourcing

Ephraim Schwartz | Sept. 3, 2008
While reading outsourcing horror stories may be somewhat entertaining, it's even better to learn from the mistakes of others.

SAN FRANCISCO, 26 AUGUST 2008 - While reading outsourcing horror stories may be somewhat entertaining, especially if it hasn't happened to you, it's even better to learn from the mistakes of others.

That's why InfoWorld talked to industry experts to summarize their best advice, based on their own experience and their clients' experiences. Those industry experts are Larry Harding, founder and president of High Street Partners, a global consultancy that advises company on how to expand overseas; Steve Martin, a consultant and partner at Pace Harmon, half of whose business is focused on helping companies repair the damage from an outsourcing deal gone bad; Peter Geisheker, CEO of the Geisheker Group marketing firm; and Patrick Dolan, CEO of BPO Management Services.

1. Establish clear objectives. It's not that the best-laid plans oft times go astray; it's that they often aren't the best-laid plans in the first place.

There is a lack of experience in what outsourcing entails. Going global with a sales and marketing initiative, for example, has implications in finance as well as most of the company's other departments.

2. Get a compatible provider. Make sure your service provider understands more than just how to code or implement. An outsourcer needs to be compatible with your company's culture and business objectives, with the right experience, communications skills, and working style. Remember, they will become part of your organization and need to fit in as well as actual employees would.

3. Don't go in shortsighted. Stakeholders often get lost in the deal itself. In the attempt to save the company lots of money, the emphasis shifts to documenting the benefits of the deal and locking prices down, savings, terms, and conditions. Often missing is a focus on the long-term result desired to justify such a fundamental switch in business operations.

4. Never confuse sales and delivery. Focus on getting a good delivery -- it's the ultimate point of the deal, but it's frequently overlooked once the papers are signed. It is those delivery details that get lost in transition from the deal guys to the execution team.

5. Change your attitude toward IT. Don't think of IT as a cost center; instead, consider it a value center. Such a switch clarifies what is key to the business and what is in fact generic, and thus what should be a candidate for outsourcing in the first place.

6. Get the communications right. Make sure the service provider understands the project specifications. Be as detailed and precise as possible. When you distribute IT functions outside your organization, you need a great deal of coordination and back-and-forth communications -- even more than when you distribute across your internal organization.


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