Time to look for a new IT outsourcing partner?

If you’re coming to the end of your contract and deciding whether to stay with your current IT services provider, what are the tell-tale signs that signal it’s time for a change?

Terminating your current IT service arrangement and appointing a new service provider in its place – a process widely referred to as second generation outsourcing –  is not as difficult as you think.

Here are four top tips to help you decide whether to stay, or move.

Look at the reasons you outsourced in the first place

Your initial reason to outsource may have been to drive cost reduction, to mitigate risk or free up in-house staff. However, as your business has grown, other factors such as improving service quality, increasing service maturity and delivering innovation may now be more important drivers than simple cost reduction.

A new wave of “as-a-service” offerings have entered the marketplace and businesses are willing to evaluate and work with new service partners to drive competitive advantage.

Evaluate the reasons why you think you want to change 

Poor service from your partner and consistent failure in meeting their SLAs is an obvious reason. A belief that you are not getting value for money is another.
But there are other important factors to take in to account too. When making your assessment look beyond just service and really measure your current provider in terms of their ability to meet your present and future needs.

Think carefully and consider whether you have outgrown your current provider. Are they able to scale in line with your growth? You may have acquired or considering acquiring another business and may need round the clock service to support international markets. Can your current provider deliver 24/7 IT support? Do they have mature enough systems and processes? Do they have a professional services team with the expertise and technical ability to help you to innovate?

Conversely, if you are with a larger service provider you may be experiencing the small fish in a big pond syndrome. Carefully consider whether you are getting the full service and attention your business deserves. If not, then you may find switching to a smaller provider will result in a much closer relationship as they will be more attentive to your needs.

If you’re experiencing any of these signs, then perhaps it’s time for a change.

But in business as in personal life, splitting from your partner is a daunting prospect. Many companies have taken this step and come out of the other side with a much better, but not necessarily cheaper, arrangement.

Investigate the risks of switching to a new partner

Do your homework. There may be a price to pay for moving the work to a new provider so figure out what it is before first. Understand the risks, costs and the level and nature of the likely disruption, and weigh that against the benefits of the transition.

Evaluate the additional value that the new supplier could provide and the additional risks in changing suppliers in terms of business disruption

In addition, the outsourcing deal you signed may limit your right to solicit and re-hire provider personnel or make it difficult for the new provider’s employees to shadow or conduct other knowledge transfer work with the incumbent’s people.

Do your research and draw up a shortlist of contenders

Having made the decision to move to a new IT services provider, success will depend on you selecting the right replacement and assessing their ability to transition and embed their service within your given timeframe. At this stage, you may not want to risk moving an all-encompassing IT services deal from one vendor to another and consider a partial transfer of outsourced functions resulting in a multi-provider environment. Coordinating multiple providers takes time and effort so you will need to factor that in.

Below are the top criteria for helping you select a new IT outsourcing partner.

  • Prior experience in managing new partnership transitions
  • Location and facilities
  • Contractual flexibility
  • Mature processes and accreditations
  • 24/7/365 availability

For more information read our IT outsourcing due diligence checklist

Make the switch to Acora

Some of our most successful partnerships are second generation outsourcers. These are organisations who have outgrown their initial provider and required the services of a more mature provider to enable them to further their journey.

Our proven methodology together with our contractual and legal capabilities has ensured a smooth transition.

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