Four factors to consider in an outsourcing relationship

Aug 28 2019
Stone Forest IT

A popular & proven mantra for success is “Begin with the end in mind.”

For outsourcing success, you should know the success ingredients beforehand, so that you choose your IT outsourcing partner with care.

There are 4 key factors to consider in an outsourcing relationship.

I. Ability to deliver

The first thing you should look for in an outsourcing partner is their ability to deliver. In reality, the whole point of IT outsourcing is to take the burden of managing your systems away from your organization! Their customer references & track record are the obvious indicators you should review.

You must also look at their tools and processes. In particular, examine how they monitor and resolve problems, and how they manage change. Take a good look at how they handle their help desk, and what tools and processes they use to accomplish that. Their adoption of international standards and models are also a good indicator of their ability to deliver.

II. Large pool of experienced professionals

You should also look for outsourcing partners who have access to a large pool of varied and experienced IT professionals. Access to such a pool of resources gives your organization the ability to bring in the appropriate talent when needed, rather than keep it on the books full-time. When critical problems arise, your outsourcing partner should be able to quickly provide the specialist expertise required at that time.

Further, as your business changes, and as required, your outsourcing partner should be able to quickly identify new team members and assign them to your organization in order to meet your new needs. Without access to a large pool of resources, your organization cannot react to change quickly since it will be limited to retraining existing resources, recruiting what resources it lacks, and terminating resources it no longer needs. All of these are costly and time-consuming activities for management.

III. Clear service level agreements

You should also make sure that you negotiate an outsourcing agreement that provides you with a clear set of service levels through Service Level Agreements (SLA's). However, choose your SLA's wisely. Think about what systems and applications matter the most to you, and ensure that the SLA's you specify match your business needs. The more guarantees you ask for, the more expensive the service may become.

IV. Leveraged Infrastructure Model

Finally, seek a partner that uses a leveraged infrastructure model. When an IT outsourcing partner shares their infrastructure assets across multiple clients, it provides your organization with two additional benefits: flexibility and cost reduction. By sharing infrastructure across multiple clients, capital and operational costs can also be shared and the savings can be passed back to your organization. In addition, shared infrastructures usually mean that the service provider has more capacity than they are providing to you.

This extra capacity can be quickly assigned to your organization as the need arises. Further, shared infrastructures are normally designed in a modular fashion that allows the service provider to make incremental changes as technology changes.

However, in order to achieve these benefits, initial investments have to be made by your organization. For your outsourcing partner to be able to provide you with the flexibility and guaranteed service we discussed, some fundamental changes may have to take place in your IT organization and infrastructure. For example, your outsourcer may have to upgrade your desktops and servers to meet certain standards. They may also need to implement specific network, security, and backup infrastructures. Although IT outsourcing deals usually provide long term savings, an initial investment is usually required.

The Bottom-Line

Outsourcing can help you become more competitive by ensuring that you get the service you need when you need it. But, you have to pick the right outsourcing partner - one that can deliver, has access to significant resources, uses a shared infrastructure, and provides you with appropriate SLAs. IT Outsourcing can save you money in the long run, but expect to invest a little more up front.


The Stone Forest group of companies provides a comprehensive suite of business solutions to support your business growth in Singapore and globally.

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