Have you been considering outsourcing some of your IT workload? If you decide to, you’ll join the ranks of Oracle, Cisco, and IBM, all of whom have outsourced projects and large-scale initiatives to programmers and systems architects around the world.
Before you choose your outsourcing firm, there are a number of things you should consider. Time is money, sure, but if you spend a little time deciding if outsourcing is right for you then you could end up saving your company a lot of money.
Outsource if it’s cheaper than paying your employees their hourly rate to complete the specific task. OK, so that’s obvious, but do you know exactly how much each project costs you? Once you have some specific figures you can begin to determine if outsourcing is a better option. Outsource if you’d like to free up your tech crew from mundane maintenance and support. Maintenance is usually easy stuff for just about any programmer, but don’t let the maintenance needs of your company interrupt the tech initiatives. If your Java programmer is busy connecting the new sales member up to the printer, then she’s not busy working on your crucial projects.
Outsource if you’re missing critical technical expertise and don’t need (or can’t afford) a full-time employee. To maximize your return, be sure to have an employee work closely with the hired hand so he can learn necessary and valuable skills. The same holds true when outsourcing for project management – team with the consultant a sharp employee you’re grooming for a future managerial role.
Be sure that both the consultant and your key employee understand that they’re involved in a skills transfer.
What About Insourcing?
Outsourcing can really help the bottom line and free up your techies for more interesting problems, but there are certain instances where you should try to keep the IT in the family.
Keep your personal crew involved on high-risk and high profile projects. These are the company-defining sorts of projects that determine the growth of your company, and your crew should be the people that make them happen. Key projects will maintain the integrity of your company ideals and allow your IT staff the chance to showcase their abilities.
Try to keep your employees from answering to the consultants. In certain instances it pays to have a consultant managing certain employees – the ones who you’d like to gain skills – but as a rule it’s best that someone in your company make leadership decisions. Your managers are motivated by the company’s underlying beliefs, and they should care, deeply, about the company’s success.
Make sure you have your team handling the customers, especially key customers. Consultants must never be the face of your company – ever. That’s what you pay and train your employees to do. So, unless you’re specifically outsourcing your customer service, keep customer contact with consultants to a minimum.
The Five Best Practices for Out Sourcing
1) At the expense of sounding silly I’d like to recommend that you consult with someone before hiring a consultant. A practiced consultant in this field can help you secure the best deal possible (since they know what other people have paid), they can evaluate internal IT service from an objective standpoint, and they can help you with establishing the crucial terms of service.
2) The key to a successful outsourcing agreement is the contract. That’s where you establish your expected performance and satisfaction levels, and set the financial penalties for under achievement. Make your contracts watertight, even if you’re having weekly cookouts with your vendor – you don’t know the future.
3) Long term contracts make for long-term loss. With the pace of technology advances, and the changing e-conomy, it won’t serve your company to sign any ten-year contracts. In addition to locking you in to deals that might not serve your best interest, long-term contracts often lower service levels, as vendors, confident in their pay, grow complacent.
4) Ease up and let the consultant do his job. There’s a reason you hired him, and it won’t benefit either of you if you’re constantly checking to see that he did the work the way you would have done it if you had the time or manpower. You’ve got to let go of the particulars and look at the results.
5) Finally, make sure you’re going with a firm that has records of their past successes. The new-fangled hotshots bring untested methods and technologies to sensitive areas of your company, and, while they may cost less, they might not have the expertise you need to get the job done.
WorldSource
One exploding field you should consider is the over-seas IT outsourcing market. Third party brokers are waiting for your call and ready to connect you with cost-saving vendors from countries like India, China, and Vietnam.
Brokers cross language barriers to negotiate and manage your contracts with programmers who charge much less for their services. Accountability typically falls on the shoulders of the brokers, too – so should anything go wrong, the broker works until it goes right again.
Again, contracts are vital, and communication becomes a key issue as your orders pass from you, to the broker, and then the programmer, allowing plenty of room for skew.
The Bottom Line?
A decision to outsource is a decision for your bottom line. If it’s your first time outsourcing, consider hiring someone to walk you through the contracts and other written expectations. The contract is where you establish your expectations for the specific job, and so it’s perhaps the most crucial part of your new outsourcing relationship.
Is outsourcing for you? Only if you want to save money, because that’s what outsourcing is supposed to be about.
Overseas broker
The Man in the Middle
The Dark Side of Outsourcing
Garrett French is the editor of Murdok’s eBusiness channel. You can talk to him directly at WebProWorld, the eBusiness Community Forum.
