You're looking to outsource IT services for your large business. How do you know which ones are the best?

As you go through best practices to select and partner with a service provider, much like a marriage, it requires commitment on both sides to make it successful. Communication, setting expectations, adhering to best practices and standards are a must with the right partner. Be prepared to switch staff on either side if it is not working out, and enforce contractual obligations on both sides. Both the outsource partner and the customer will have their fair share of challenges along the way. But together they can be successful. Despite picking a good partner project(s) may not work out. Be prepared (contractually) to end the relationship if you cannot turn it around. A comprehensive contract is essential for success or failure.

Attention: The main service provider value proposition behind the economic is „we run your mess for less“. If you would like to improve, transform or renew your ICT operation, you should be willing to invest into a transition project and into detailed Service Level Agreements that are controlled via a realtime dashboard. Define clear KPI‘s that are bound to your daily dependency on ICT availability.

When it comes to outsourcing IT services, it's important to be clear about your specific needs and requirements. IT encompasses a wide range of areas, such as applications development, product development, and much more. By clearly defining what you want to build, you can narrow down your search for the right development partner. Each IT services company has its own specialization and expertise. Understanding their areas of focus will help you identify the most suitable partner for your project.

Often, IT outsourcing is perceived as a two-step process—pre-outsourcing and post-outsourcing—yet, this approach often leads to pitfalls. Instead, outsourcing is not a strategy, it is a mean to meet the strategic objectives. Why outsource? Is it due to the challenges of maintaining specialized skills, insufficient capacity, cost, etc. Once the objectives are clarified, the focus should be on by target end-date. What to prefer to get back after many years of outsourcing? The goal is not to receive the same outdated solutions 7 years older at the end! By incorporating two preliminary steps before, and a planned renewal step after, it becomes evident that the outsourcing process must at least be a 5 steps journey wit continuous follow-up.

▶︎ Look for providers with a strong reputation and positive client reviews. ▶︎ Check that provider has experience & expertise in the IT services your business needs. ▶︎ Select provider capable of scaling their services as your business grows. ▶︎ Verify that the provider follows industry best practices for data security and compliance. ▶︎ Review SLAs and Compare pricing structures and evaluate the value offered in relation to the cost. ▶︎ Verify the provider's comute channels and support availability timely when needed. ▶︎ Look for providers who stay updated with the latest technologies and innovations to provide cutting-edge solutions. ▶︎ Check the cultural fit for the smooth transition. ▶︎ Request references from past or current clients.

Competition will hate me for exposing us, but here's the thing: reputation and experience are useless. Do it to feel comfortable with yourself before plunging. You've heard this: "Nobody ever got fired for buying IBM." When you buy into the reputation of an agency, you're not guaranteed to buy the precise configuration that helped build that reputation in the first place. I advise you to do this instead: 1. quick initial due diligence 2. create micro-experiences that can build a fresh, customized reputation for your concrete goal and relationship. Do something small, assess the results, build on that, or move on. It just sounds more tedious; in reality, it's faster and yields better results.

Outsourcing your IT services is as much as about assessing your own readiness as it is the assessment of the services provider that you'll be working with. Make sure your own team is willing to adapt to some of the changes necessary to succeed when partnering with an external consultancy. Do you have clear definition of success? Do you have ideas on how you'll measure progress? Are you willing to partner up, and work hand in hand with someone from a completely different culture and go through the cultural learning curve? Make sure that you "silence" any previous bad experiences with outsourcing by putting in a plan to check on those challenges consistently.

Fit is critical. Your provider must share your values and have empathy with the team. Having the right technical skills is simply not enough, there needs to be trust and competence and above all, confidence that your provider will support you when you need it and look to billing and contract after the fact

It’s very important to understand the reputation and their past history with the specific skillsets etc. But also it’s important to understand the culture and goals of the companies. Are they right fit for what you want yo outsource. Will your team get the attention among all of their customers. Is our current outsourcing engagement to small or too big for them. Etc. etc.

I would add that cultural fit is also important. Companies that have compatible values are likely to work together more effectively.

Be aware of price versus value. Cheap can be expensive. Therefore, when evaluating pricing also consider the quality of work and end product.

price is important but value is more so. a race to the bottom will leave you disappointed while paying through the nose will leave a bad taste. It's better to take time to evaluate your needs and put a price on these, then let your provider know the price you place on the value of their service. If it's different to the value they have then it's probably the wrong provider

When selecting an IT outsourcing partner, it's akin to making a wise investment. Beyond the price tag, delve into their value proposition. Understand their pricing model, be it fixed, hourly, or project-based. Unearth any hidden costs and gauge their adaptability to changes. However, the true measure lies in how they enrich your business and propel you towards your goals. It's not just about the expenditure but the dividends of value they yield.

Why are you outsourcing? are you looking for resource augmentation? do you want an outcome? do you need to make a saving? There are several commercial offerings, but remember you need the outsourcer to be a viable business as well as yours. So avoid looking them into cheap pricing to help you achieve any savings, with out realising there will have to be service adjustments to achieve. Be aware that in this example, change control is strict and any change of service will be a change request with additional charge.

My view on this is that you get what you pay for. If you're looking for the cheap alternative then you'll get the cheap service. There is a reason why it's cheap, so ask why. If it's not the lack of technical skills then it's the lack of social or cultural skills. It makes sense to engage a cheap technical expert, who will not speak up when a requirement is bad, or when the solution that you're asked to build is making no architectural sense. Always partner with someone who can understand your current culture, your needs and wants, and will be able to describe your business better or similar to you. Cost should be the last attribute you consider as time to market could cost you so much more.

Any service is only as good as the people who deliver it and unless the supplier has a solid methodology for recruiting staff the service can degrade over time, or quite quickly if they bring in the wrong individuals. During due diligence when your looking at a supplier have a conversation with their Head of Talent Acquisition or HR to make sure that they have the sort of processes in place you have for your own team.

There is nothing better than checking into other people experiences with the outsourcing partner. So go ahead and ask for specific references that mostly match what you are trying to do. Do not accept general commentary or experiences, look for chatting with someone else, from a similar background and culture as yourself, from a similar or same industry, and ask to talk to them. Listen to the good and the bad, and compare how your organization is prepared to deal with both. No organization is the same, but you will learn so much from others' experiences if you just talk to them.

I suggest to predefine an evaluation framework that evaluates the company itself (size and track-record), the solution provided and the people and governance to make the outsourcing successful. Questions I like to use to identify if someone has experience are around risks and issues. If the provider has some down-to-earth answers that show me they have been there, it eases my mind a lot.

I also evaluate location of the resources to ensure that we can have effective collaboration between internal and external teams.

Don't just look at the company, look at the specific account team that will be assigned to you. Oftentimes suppliers bring in a bid team then throw the contract over the wall to an operations team who will run things. What we want as buyers is to have confidence that the account team is experienced in our industry and can handle the size, scope, complexity, and regulatory environment for our business. There should be continuity of key personnel from bid through execution. Great suppliers who send the proverbial A-team are desirable, but that won't happen without diligence in the RFx process.

Communication is super important. Ask to speak to your specific team members as you don't want to have extra layers of management when you're dealing with a very dynamic project and tasks. You want to create an environment where it feels like your team is just next door to you (and you can walk up to talk to anyone), even if they're thousands of miles away.

The benefits of cultural affinity and time zone alignment are pivotal yet often overlooked. Nearshoring offers companies a strategic advantage by fostering collaborations with partners who share similar work ethics, business practices, and language. This common ground significantly improves communication, boosts productivity, and facilitates innovation, key for thriving in digital transformation. Moreover, the importance of time zone proximity cannot be overstated. Nearshoring to regions with minimal time differences ensures synchronous work opportunities, crucial for agile methodologies and timely project delivery. It also potentially extends a company’s operational hours, enhancing service coverage without compromising efficiency.

It is critical to ensure the teams on both sides get along well. The communication has to be good to make the integration seamless. When a client approaches us to handle their planned outsourcing needs, we first ensure we talk upfront on frequency and mode of communication. How they handle feedback and suggestions is essential. In addition, their approach to handling roadblocks, failures, and errors is critical. The organization should be transparent about the overall process.

Communication, the way, and the mode define the success of any project. Conversation over instant messaging tools or massive emails leads to unmanageable situations. Actionable points and delivery timelines are the Key Performance Indicators of any Project lifespan. Communication with IT Agency, internal team, or consultant should have established a formal channel to convey the requirement along with the expectation in terms of QC test cases and timeline. Collaboration within the team with the development progress and QC test results also helps to foresight the project timeline.

Key to have some time with their delivery team. Be aware that you may only be working with the pre-sale team at the start. Check during meetings who is in the room that will be involved in the delivery.

When you review the terms, make sure you understand the SLAs that you agree to. Be sure you can function with the company waiting til the end of their SLA to do the work. They may save all the work and batch process it instead of as it comes.

Your own study about the company to be outsourced is crucial. The reputation on social media now a days can be easily manipulated with advent of tech like AI. Understanding the health of the to be service provider in terms of their growth, value they created and sustainability in the market should be consideration while getting into a legal binding. Your own customers and pain areas of your own business should be known to you and you need to check if the IT service provider is able to cope of with that. Maturity of people, process, methodologies used by service provider and ability to met your future expectations should be considered as well.

Be prepared to Invest in educating the outsourcing delivery team about your business, the culture, why they are adding value to your business. They are part of your business model so treat them as such and continually review how to keep them aware of the value you expect from them and why.

8. Cultural Fit While as there are a lot of players in the market today and all of them have varied degrees of capabilities and the space is quite competitive. At the same time in most cases these are long to medium term contracts. In most cases they expect the IT outsourcing organization to be an extension of their IT organization. In such a scenario increasingly clients are also giving a weightage to the cultural fit between the organizations and how well the values of the IT outsourcing company align with theirs.

It is important to understand what is critical for you to retain. Is it competitive advantage, skill set or proprietary? The most critical part of any outsourcing agreement is what you won’t let out of your immediate and direct control.

Choosing major software service providers is a smart move if you're a large enterprise. They boast a vast talent pool to support your needs and have deep insights into large-scale business operations. They can apply extensive experience in transformation and IT outsourcing to assist your company effectively. Your values regarding approaches, security, and culture align, making collaboration seamless. Working with large businesses feels straightforward and mutually beneficial.

As always, two old expressions come into play. One - you get what you pay for. Go cheap and expect cheap resources. Two - you get what you measure. The contractor will do what it takes to meet the KPI, make sure they are what you really want. Just closing a ticket does not always mean the issue was solved.