Getting outsourced IT help is just like any business transaction or decision. You do not close your eyes, plunge into the cold water and hope that everything turns out okay.
So if you are planning on hiring an IT outsourcing company, you should know how to better evaluate different service providers and also know what should be included in a service contract with your chosen provider.
Part I: How to Evaluate Your IT Outsourcing Partners
Things used to be very simple when it comes to evaluating and hiring somebody. For some, you just list down the pros and cons and go with the one that has more advantages and benefits. When hiring an IT outsourcing partner, however, you need to remember these three things when you are evaluating two or more providers:
Make a list of the things you require. Even before you pick up the phone, you should first make a list of all the services that you need from the outsourced service provider. That should also include the skills you are looking for, such as specific programming language, platform and operating systems, and familiarity to specific programs and applications.
One or multiple companies? You should also decide whether to work with just one IT outsourcing provider or with several. If you have extensive service requirements, then you might want to work with several companies as it may be difficult to find one that could properly address all of your needs. But doing so can also make things more complex since you would be working with different people with different service-level agreements. Plus, if things go wrong, then you only have one neck to choke, meaning pinpointing responsibility would not be a problem.
Cost. When choosing from several providers, one of the biggest factors that would make you decide for one instead of the other is the cost. That is, all things being equal and with two or more companies having all the expertise that you need, you are more likely to go for the cheaper one. Take note that one of the many reasons why you are outsourcing is to save cost and still get guaranteed IT help that is of high quality. Take note of the outsourcing company’s service agreements. Usually, if the outsourcing provider cannot meet their service level agreements, then they will pay penalties or give you refunds for that. This means that just looking at the cost is not enough. One company might be cheaper but there is no guarantee that they will deliver on their promises and you end up paying more for a service that leaves you frustrated.
Part II: The Three Things to Look for in an Outsourcing Contract
If you are new to outsourcing, you should still have an idea of what to expect from a service partner as far as contract goes. The outsourcing contract would detail the services performed as well as the costs, and other details. So what should an outsourcing contract include?
1. Scope and cost of work
An outsourcing contract should always detail what services you are purchasing in a language that is easily understood so that it would not be misunderstood or misinterpreted later on. As for pricing, ongoing services are usually paid monthly. There are also project-based contracts that could be paid according to a certain schedule or a series of payments.
There should be a benchmarking provision. This is because technology is very dynamic and the prices of doing business with IT often falls. So there may come a time when the services you pay for are actually cheaper to do than when you started. This allows you to negotiate for better fees and rates.
Governance and work monitoring software is very helpful in helping both the provider and the business owner keep track of the project or services rendered. These software allow you to evaluate and monitor work done and completed. There should also be provisions that list down the actions that you can take if service level requirements are unmet.
3. Disengagement plan
The disengagement plan details what happens when the outsourcing relationship ends. It should detail how the tasks are handed over to your own IT team or how to terminate the contract, or however it is you want to proceed when the engagement is finished. As such, details on ownership rights, data transfers, information transfers and other similar issues should be ironed out in the disengagement plan.
Bonus: The Service Level Agreement
While technically not part of the contract, you should also ask for a separate service level agreement that would list down specific details of the outsourcing partnership. For instance, the help desk would be available 24 hours a day or during the hours of 8 am to 8 pm every day including Saturday and Sunday. These details should nail down even the minutest details of the service you are paying for.