How to Evaluate Your Outsourced IT Resources

Featured article by Rick DelGado, Independent Technology Author

Outsourcing your IT resources can be the ticket to higher quality and lesser cost, but for many companies, this isn’t always the case. You could be wasting your money. If you’re already outsourcing, is it right to continue? How can you tell if your outsourcing is successful or a bane? Here’s how to weed out the problem.

1. Set Defined Requirements

The best way to avoid a leech on your company is to decide what your ground rules are; what are the “musts” for your outsourcing? What is the necessary level of cost reduction? What is the growth or reduction of FTE your business needs? What is the percentage of productivity you need to increase each year? If you want the cost of FTE to drop by 40%, then you need to ask if this is actually feasible, and what is the absolute lowest drop you could accept? Can you accept a concession on one requirement if the other is met? Evaluating this gets rid of wishful thinking that just a few more years of progress will deliver your goals; if it’s not trackable, it’s not happening.

2. Choose an Outsourcing Model

Not all outsourcing models are built alike. Your choice must work well with your company’s vision, the culture of your existing employees, your budget, your sales forecast, and the division of labor in your upper management. One model may include taking on an off-shore employee to fill the shoes of an on-shore employee; another may be tasking a small company to handle a certain project; another may be handing over an entire department to an outsource company. Each have varying levels of risks and rewards. Is the one you have now working? Could another do better? Perhaps hiring a company for a project is more cost effective, but hiring an employee could allow that worker to integrate with your existing employees so they have insights a contractor wouldn’t.

3. Understand That You May Be Fair, But Your Provider May Not Be

Often times outsource companies in countries such as India are looking to gain a better profit than you. That means demanding a wage that accommodates the costs of living, yet they hire “freshies,” newly graduated college students, and pay them a lesser wage for their inexperience while selling you the same work. Decide the absolute amount you are willing to pay, evaluate the work being delivered, and research your vendor, so you can see if your money is being put to good use, or if both you and the employee are being cheated.

4. How Much Delay Can You Allow?

To find the right vendor, properly train the new employees, modify working structure to improve productivity, and generally get the right people on the right page – takes time. You may be allowing poor quality to partner with speed. If you want to continue outsourcing, evaluate the absolute maximum delay time you can allow, and what can be done to ease the blow of this fall in productivity. While you’re finding a quality vendor, how long can you go without this outsourced labor? You need your new employees to understand the project and be as invested in it as you; how long will this take, and who are the right people for it? To get it right the first time and to overcome the cultural and knowledge-based obstacles between you and a good vendor, you need to take your time. If this slows you too much or the cost is too great, consider keeping the work at home.

5. Outsourcing Doesn’t Mean Less Work for You; Just Different Work

Outsourcing your IT resources like flash storage doesn’t mean you can now rest back on your laurels and watch while the work is done. While you may not be doing “the work” itself, you have now signed up for intense management and problem-solving. Ensuring that your outsourcing is a success means constantly monitoring the risks and rewards that could come about in the future and that are already happening. Giving guidance, removing employees or vendors who don’t get the idea, helping integrate the off-shore workers with your existing on-shore employees, tracking work flow and profits, and essentially keeping an eye on each Jenga piece of the tower is now on your plate. You may not be doing the IT work, but you’re working for the IT. If your management doesn’t have the time or the resources to commit to this, you’re better off staying put.

by Rick DelGado, Independent Author

“I’ve been blessed to have a successful career and have recently taken a step back to pursue my passion of writing. I’ve started doing freelance writing and I love to write about new technologies and how it can help us and our planet.” – Rick DelGado