Common Questions

Common questions

How do I choose an outsourced IT services provider?

• Have a conversation: Speaking to the service provider is the best way to gauge their approach to your business. What questions do they ask? How much space do you have to explain your particular business issues? What level of detail do they go into before recommending a solution? It’s important to have a good sense of the focus and priorities driving their business at the front line.
• Do your due diligence: Make sure the service provider’s finances are robust, and pay attention to the level of experience they have with your business sector and size.
• Look at customer testimonials and peer recommendations: How similar are their business objectives/difficulties to your own? How detailed are the testimonials?
• Look for flexibility: How flexible are their outsourcing strategies? Is there a significant element of tailoring according to specific business needs?
• Expect business acumen, not just technical expertise: How attuned are they to your business needs and strategic focus? Does their consultation explore your business vision as well as the IT side of things?
• Find a cultural fit: Outsourcing needs to work as a partnership to yield real value. A misfit from the start might lead to difficulties down the line. What are their values? Does their business strike a chord with your own?
• Look for partners who share the risk: The outsourcing model is changing. Look for experts who are willing to share risk, commit to outcomes-based contracts and innovate to flex around your objectives.
• Look for value-creation, long-term: Choose an outsourcing partner who commits to provide regular insight and reporting throughout the full term of the contract. Conducting multi-year contracts in a volatile and ever-changing market requires constant scrutiny and reassessment to ensure maximum value is always being created for your business.
• Don’t ignore your gut feeling: Remember, this is a significant partnership. Do you trust that they will do the best for your business?

What are the common pitfalls?

• Miscommunication: Failing to overcome the language barrier – when they’re talking technology, you’re talking business. Make sure any potential partner is talking to you on a business level so you can be perfectly sure about what you’re being offered.
• Lack of strategic acumen: Clearly establish the strategic vision of your business with your outsourcing partner. Addressing the nuances of a changing strategy requires expertise and experience; establish early on that the business you are outsourcing to has the right level of strategic capability. If not, the partnership will become a risk rather than an asset.
• Failing to establish specific outcomes, objectives and exit clauses: Entering into an outsourcing partnership without being absolutely clear about the objectives and outcomes you hope to fulfil from outsourcing your IT will significantly limit the benefits to your business. This sort of confusion can lead to a relationship breakdown and very costly withdrawal from the contract. It is essential to build in a coherent exit strategy in case the relationship does not meet expectation.
• Delegating to the wrong person: Don’t underestimate the importance of the selection process. Outsourcing is a major commitment and needs board-level attention and management. The partnership must be aligned with board-level strategy and vision, or it will never create value for the business.
• Failing to establish proper management: Do ensure someone is assigned to take ownership over the duration of the contract, to provide proper management and open paths of communication.
• Underestimating the importance of culture:  An IT outsourcing relationship needs to function as a partnership if real value is to be created for your business. Whether you are expecting your IT partner to work in-house or strictly off-site, a partner with the same values, work ethic and business objectives will naturally understand the needs of your business, and integrate themselves seamlessly.
• Poor due diligence: Before committing to transfer the financial burden of your IT to an outsourcing partner, you need to know that their balance sheets are robust. The collapse of their business would be disastrous for your own – do your due diligence before committing to a multi-year contract.

How do I measure the value of IT outsourcing?

Though the benefits of IT outsourcing can be felt immediately, they might take some time to quantify. Some of the more intangible value includes:

• Enhanced productivity and output
• Increased efficiency: your people working better, faster
• Cultural shifts: moving towards a fully collaborative, mobile, innovative culture; open to change and more willing to embrace new technology

Other, more quantifiable ways to measure value are:

• Reduced monthly costs as processes are streamlined
• Financial stability as unpredictable IT costs become a stable monthly operational cost.
• Greater reserves of capital: freedom to invest for value-creation in other areas, or simply to safeguard the business in the event of losses
• A strong balance sheet for customer and investor peace of mind

What can I do if things go wrong?

If outsourcing does not deliver what you expected, if your strategy changes, if the outsourcing partner decides on a different business model, or if the whole market turns in a different direction, you must be able to regain control of vital, sometimes critical, processes.

When you are assessing the situation, be aware that what you take back may not be what you outsourced. New systems and applications may well have been implemented, processes altered. If you didn't establish an exit agreement, things can become very complicated.

It's important to have a clear sense of how you wish to end the relationship before it becomes a necessity and, preferably, when you are negotiating the contract. Establishing what failures might warrant this earlier rather than later will also focus your attention on what exactly you want to achieve. This will help you have a much clearer view when selecting your outsourcing partner, reducing the likelihood of needing to terminate the contract.