Selecting an Outsourcing Vendor
Selecting an Outsourcing Vendor
- How should I conduct the outsourcing selection process?
Choosing an outsourcing partner requires a process-based approached. This process involves determining your primary outsourcing drivers, engaging executive sponsorship and identifying the outsource components. The challenge is identifying core competencies and then determining the other components of the organization that can be outsourced cost effectively.
OneNeck has developed a comprehensive outsourcing selection methodology that provides a roadmap to move a company from exploration to selection. This selection methodology, as well as more information on this topic is available by request.
- How do I compare vendor solutions?
Two main components help compare an outsourcing vendor. First, from an analytical service provision standpoint, you perform an apples-to-apples analysis of each vendors proposals. Because no outsourcing proposal is created equal, vendor proposals include different service provisions and may even limit scope, hiding levels of effort and thus costs in expensive time and material rates. To identify such liabilities and accurately make a comparison between vendors to determine which vendor is right for your business, a vendor comparison matrix is necessary. A vendor comparison matrix breaks down -- in detail -- the services provisioned in the outsourcing proposal and whether they are included into the monthly price. To save you time in developing such a comparison, contact OneNeck to receive a matrix that may be useful to your business. Simply click here to email your request.
Second, it is extremely important to compare the providers themselves, including financials. Long term financial viability is absolutely paramount in choosing the right outsourcing provider. Also, be sure to check references -- both existing and former customers can give you a better understanding of how the vendor performs and delivers.
- What do I need to evaluate when structuring a service level agreement?
By the time you ask yourself this question, you should have identified the components intended to be managed by an external provider. You will need to develop a matrix that lists these components and the critical nature of each item as it relates to your business. This exercise can highlight potential cost savings. For example, you could put more robust Service Level Agreements (SLAs) on those critical components and reduced SLAs associated with less critical components.
In general, look for a Service Level Agreement that provides measurable statistics that fit your business. Some areas to consider would be:
- Systems Availability for production hours
- Systems Availability for non-production hours
- Physical data center security
- Operator-attended operations
- Support Center responsiveness
- Service interrupt management
It is a good idea to understand how the metrics are computed that are associated with the Service Level Agreements. Additionally, have the potential vendor explain what the remedies are should the Service Levels not be met and the historical frequency of applying these remedies.
Perhaps most importantly in an evaluation of a Service Level Agreement is timely and recurring reporting. You should receive reports from your vendor that provide you with the service levels actually achieved during the period. Ask your potential vendor to provide a sample of their metrics report and ask how often the reports are produced. It might also be a good idea to check if they are open to adjusting the metrics as your relationship matures.
- What makes OneNeck different from the competition? Why should I select OneNeck for my outsourcing projects?
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