Ten critical questions you should be asking before you outsource services.
“We need to focus on our core business.”
“We should dedicate IT to strategic projects, not systems maintenance.”
Sound familiar? Widespread sentiments like these are driving an upward trend in IT outsourcing, and redefining what was once primarily a cost-cutting measure into a cornerstone of business success. Indeed, IT advisory firm Meta Group estimates that 80% of companies plan to outsource some IT function by 2003. “Outsourcing is a competitive necessity in the era of e-business,” says Dean Davidson, Meta vice president of service management strategies.
As outsourcing becomes both more pervasive and mission-critical, the burning question is no longer “should I outsource?” but rather “what should I outsource, and to whom?” Yet 70 percent of IT managers, according to Meta Group, lack experience in making outsourcing decisions.
“To whom” poses a particular challenge: whereas the lowest cost provider may have been a justifiable (though not necessarily judicious) choice in the past, lunging for the low-ball player spells disaster when vital operations are at stake. Instead, savvy organizations recognize that taking care to select the right outsourcing partners is key to maximizing the effectiveness and value of these relationships.
Companies must therefore carefully assess the offerings, experience and demonstrated capabilities of potential providers. “Don’t assume a vendor can deliver 7×24 uptime or anything else just because it claims it can,” warns Davidson. “Organizations should make sure providers prove they have the requisite skills.” In this spirit, here are ten crucial questions that you must ask—and your prospective provider must answer—upfront. Ignore them at your peril!