Choosing an outsourcer: Check IT List

1. Admit that you can't do it all. Few organizations can truly say that IT is their core competency. Most can't afford to dedicate the internal resources necessary to maximize the value of their IT operations while they are also struggling to survive in their core businesses. Even though outsourcing is a business imperative, it isn't necessary to outsource your entire IT operation. Instead, you can now selectively outsource or "out-task" specific IT functions.

2. Identify what you're good at. There are two approaches to outsourcing or out-tasking. Some organizations outsource poorly run functions to improve those operations. Others outsource routine IT functions that they view as less risky to hand over to an outside firm. The key is to focus on your core competencies and outsource those functions that distract your limited resources from responsibilities that bring the greatest value.

3. Consider what you're bad at. Simply offloading IT problems to an outsourcer won't make them go away. In fact, few outsourcing deals that simply transfer the burden of poorly designed IT operations succeed. Instead, it is important to thoroughly examine the root cause of the problems, quantify current performance levels and set realistic service-level expectations to establish a successful outsourcing strategy.

4. Determine IT and business goals and objectives. An outsourcing strategy should be closely tied to an organization's overall business strategy to ensure that the IT operation can continue to fully support the organization's business goals and objectives. Whether the business goals are to expand into new markets or to reduce costs, it is essential that the outsourcing strategy be designed to fulfill those objectives.

5. Get an independent opinion. Internal assessments of outsourcing requirements are often distorted by varying business pressures and personnel issues. These assessments also lack industry perspective and benchmarks that can provide valuable insight into the expanding array of outsourcing alternatives.

6. Talk to your peers. There is no better source of valuable information and insight on outsourcing than IT professionals who have gone through the experience. The downturn in the IT industry has had the ripple effect of eroding the number of user groups and industry events where IT professionals can trade information and insight on their challenges and outsourcing experiences. Therefore, it is necessary to make a more concerted and structured effort to solicit other IT professionals regarding their outsourcing experiences and advice.

7. Select an outsourcer with proven experience and a strong balance sheet. As the hardware and software product business continues to stagnate, many vendors are attempting to transform their companies into outsourcing firms. This is a tough transition that few have successfully achieved, with the notable exception of IBM, Hewlett-Packard Co. and Unisys Corp. Given the multitude of experienced outsourcing companies -- both large and small -- it isn't necessary to risk your IT operations on inexperienced, unproven outsourcers.

8. Develop specific contractual terms and conditions. Clearly state your IT and business goals and objectives, the methodology and milestones that will be used to achieve the goals and objectives, and the metrics that will be used to measure success

9. Establish a structured reporting and communications process. A successful outsourcing agreement should not dwell on the penalties that will be levied if an outsourcer fails to meet its obligations. Instead, the agreement should establish realistic goals, tangible milestones, ongoing monitoring and reporting procedures, and collaborative problem resolution policies that create a team approach to mitigating the risks associated with outsourcing.

10. Be prepared for a bumpy ride. Like any relationship, nearly every outsourcing engagement will have its initial problems as the organization and the outsourcer get to know one another and uncover unanticipated issues. They can overcome these initial problems if they approach them collaboratively with a mutual commitment to the long-term success of the outsourcing engagement.

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