Factors for successful IT outsourcing

Factors for successful IT outsourcing

IT outsourcing can pay off for companies. However, only if they proceed with the appropriate care. Above all, the preparation phase is crucial. (Image: Pixabay.com, bsdrouin (CC0))
Lower costs, higher quality! This is the central demand of the stakeholders in many companies. In this situation, many people in charge decide to outsource part of their IT. That sounds like a promising model, at least in theory. In practice, however, this is a project in which a lot of stumbling blocks can lurk. In order to actually meet the demands of the stakeholders, the following factors in particular should be considered.

Describe the project in detail

The first step is to find a selection of possible service providers for the planned outsourcing project. To do this, it is necessary to describe the project as precisely as possible and also to formulate the respective requirements for the potential client in detail.

A target / actual comparison is useful for describing the outsourcing project. The current status is described first. The next step is to describe the target state. This is the state that should exist in IT after the project has been successfully completed.

For larger projects, it is advisable to formulate appropriate intermediate goals. On the one hand, these offer contractors the opportunity to better understand the overall project in detail and, on the other hand, they are only recommended for those project phases in which the relevant expertise is available.

Find suitable providers

In order to find suitable providers for the planned outsourcing project, interested parties should be asked to provide a suggestion for a possible course of action. In many cases, the wheat is separated from the chaff, and it is at least clear to see who is completely lacking the competence to do this. Additionally, consider exploring online resources to gather more insights into potential providers. Visiting the website of established IT companies such as GiaSpace, for example, can offer valuable information about their expertise, past projects, and client testimonials. This multifaceted approach ensures a thorough evaluation, enabling you to make informed decisions when selecting outsourcing partners who align with your project requirements.

The company size of the implementation partner plays only a subordinate role in terms of their competence. However, it is an important factor in terms of resources. For smaller projects, it is often sufficient to competent support on a freelance portal such as looking for Fiverr.

On the other hand, larger projects, the course of which can take several months or even years, also require a corresponding volume of available resources. The implementation partner should be set up in such a way that they can replace individual project employees in the event of vacation, illness or unplanned long absences with a competent representative.

When choosing an outsourcing partner, the following questions can be particularly helpful:

  • Do you have the appropriate IT know-how for the project implementation?
  • Does the company have the necessary industry experience?
  • Which reference projects can be presented?
  • How is the company financially positioned?
  • Are there sufficient resources?
  • Are subcontractors commissioned for the implementation?
  • How is the emergency management set up in crisis situations?

Formulate the requirements

The next step is to ask companies interested in implementing the project to submit a binding offer. In order to receive the most accurate offers possible, the requirements should be formulated accordingly. To do this, it is advisable to subdivide these into several areas.

The following sections are available when implementing an IT outsourcing project:

  • Technical requirements: It is particularly important to describe what the current infrastructure in the company looks like and which interfaces must be taken into account or replaced in the outsourcing project.
  • Functional requirements: This section describes exactly what the system should be able to do after outsourcing. The scope of services can differ from the current status. Both more and fewer functions can be required.
  • Legal Requirements: Especially if the client is a public institution, laws and legal framework conditions must be observed when implementing the project.
  • Features of the service provision: Here it is necessary to describe how it can be determined that the IT outsourcing was successful.
  • Key performance indicators: With the so-called KPIs it is a matter of defining appropriate key figures that relate to the success of the future system.

The requirements should be formulated as precisely as possible, because this makes it much easier to compare the offers in the future. The more detailed the expected services are described, the more unlikely it becomes that the outsourcing project does not go as planned or, in the worst case, even fails completely.

Select the appropriate project partner

Even if the offers leave a competent impression, that is no guarantee that the projects will be implemented accordingly. It is therefore important to scrutinize the formulations a little if necessary. It is easier to double-check carefully before signing a contract.

There are several possibilities to find the right implementation partner for your project from the available offers. Some entrepreneurs rely on a comprehensive SWOT analysis here. A point system, however, offers better comparability.

Each individual factor is given different levels of importance. The points are then weighted accordingly. If, for example, industry experience in a project is considered to be extremely important for successful implementation, this point can simply be weighted higher. In addition, it is important to define a minimum number of points for each individual area, which must not be undercut in any case, in order to receive the project award.

In order to achieve a high degree of objectivity in the awarding of points, at least three people should be involved in the assessment. They should be familiar with the topic, but do not necessarily have to be directly involved in the outsourcing project. The wider the spread in the jury, the more objective the result will be. If the jury is too large, however, this could compromise judgment because the individual members have too little knowledge to actually assess the offers.

Perform due diligence

Many claims can be made in the offers. Before a specific implementation partner is finally awarded the contract and the signature is placed on a corresponding contract, it is important to carefully analyze the respective company or person in terms of economic, legal, tax and financial circumstances.

The extent of this check is again dependent on the scope of the project. For small outsourcing projects that are carried out with a freelancer, a so-called “Simplified Due Diligence” is sufficient. In the case of large projects, detailed information about the company and the employees involved in the project is obtained as part of an “enhanced due diligence”. This also includes a reputation check, especially for projects in the public sector.

11/02/2021

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