Outsourcing is for Value, Not Just Cost

The best IT outsourcing situation is not always the one where you get dirt cheap prices on the services you need. The best outsourcing relationship is always one where balance, focus and price meet to create a business process that is workable from day one to the last day of the contract.

Outsourcing is for Value, Not Just Cost

How exactly do you find that perfect blend?

1. Make sure you have a killer contract. If you are outsourcing to the Philippines, you need to check the local laws and taxes before you set up your business. Any IT outsourcing contract is a very complex agreement so you need to fully understand and question the validity of the outsourcer’s terms and conditions. This contract will be something that you will have to live with for a long period of time and by making it work, you make sure that you get the best of that outsourcing has to offer.

Make sure that you check on governance rules and regulations on offshore staffing, delivery sites. You should also check for a termination clause that clearly states what issues will cause you to terminate the contract earlier. These elements are very crucial in an outsourcing contract.

2. A well-defined Statement of Work or SOW. A good SOW should clearly define what is expected of the service provider and the client. Knowing who manages and interacts with the offshore team will cause less confusion later on. IT outsourcing is not about micromanaging. It is about delegating the work to capable people. If you do not have a clear definition of who’s responsible for certain tasks for the team, you will end up getting frustrated soon.

3. Metrics, metrics, metrics. Make sure you measure your team’s performance. This is not to intimidate the team or to seem like you’re pinching your penny too much. This is to make sure that your offshore staffing team understands their job well. Having a Service Level Agreement will take care of performance expectations.

Price is always an important part of any IT outsourcing project. However, there is more than just price to consider in a good outsourcing relationship. As a business, you have to look at the big picture. You need to focus on maximizing your investment by lowering the risks and sharing the rewards with your outsourcing partner. Outsourcing to the Philippines, for example, is a very good choice for companies who are trying outsourcing for the first time because Philippines outsourcers have a lot of experience. They can also help you ease into the outsourcing transition phase so that you can get the best value for your investment.

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