| TABLE OF CONTENTS | | | | is the role of each member? |
| - Introduction | | | | What are the escalation procedures? |
| - First, ask yourself | | | | To what level will senior management participate in |
| - Prepare the structure | | | | planning, development and other aspects of this |
| - What should you ask | | | | account? |
| - The Checklist | | | | What experience does the management team have? |
| - Conclusion | | | | Please provide a description and background of your |
| | | | | implementation team. Will the implementation team also |
| Introduction | | | | act as the ongoing service team? |
| There are certain themes, standard questions and | | | | ! You need a team of experts. Experience is important. |
| particular aspects of the project that will shape up the | | | | You want people who have administered plans of |
| questionnaire you need to put up in order to find the | | | | similar size and complexity for at least five years. Be |
| vendor that best suits your needs. But most of the | | | | certain the team members are experienced benefit |
| time, if you ask standard questions, you will get | | | | administrators. Industry experience is not sufficient. |
| “standard answers” built on the marketing | | | | They also must have experience inprocess managing, |
| philosophy of that vendor. | | | | outsourcing contracts managing aso. Also, you |
| In order to avoid the empty phrases and get the | | | | don’t want to strategize and work with one team, |
| answers that form the real image of your vendor, you | | | | and have it then transitioned to another. Be sure your |
| can squeeze in some “tricky” questions. All of | | | | implementation team is also your ongoing service |
| these standard and tricky questions we have resumed | | | | team.) |
| below in what we call “The Outsourcing | | | | PEOPLE |
| Checklist”. | | | | More than managerial experience, the people you’ll |
| First, ask yourself | | | | be working with need to have the proper expertise for |
| One of the mistakes companies make within the | | | | the area of your project. |
| process of selecting a vendor is not completing the | | | | What education requirements do you have for your |
| first step — the needs assessment. The organization | | | | employees and what training programs |
| and communication of the internal assessment is | | | | areestablished? |
| essential. Without a complete assessment, you can't | | | | How does your company keep up to date with the |
| prepare a good questionnaire for a potential vendor. | | | | latest industry knowledge and standards? |
| While the RFP becomes a document that is sent to | | | | What employee retention initiatives do you have in |
| potential service providers, good practice considers the | | | | place? |
| RFPnot just as document by itself but an entire | | | | Can you scale up quickly? How? |
| process. You won’t get the information you need | | | | Do you use subcontractors for any work performed |
| just by putting an | | | | for the client? |
| RFP on paper. You have to manage a complex | | | | PROCESS |
| business process. | | | | Make sure the vendor has well determined working |
| On the surface, that process involves feedback | | | | procedures. Also, find out if its process approach suits |
| exchange with potential providers until you find the right | | | | your operations and that you will find it easy to |
| one. | | | | collaborate and communicate during the process. |
| Moreover, it is the result of an internal process carried | | | | What relevant certification for the project has the |
| out by a cross-functional team that includes | | | | company achieved: CMM, ISO? |
| representatives of all the operating areas of the | | | | Do you have a defined project management |
| company that will be impacted. It includes support and | | | | methodology? What are your reporting guidelines for |
| sign-off by senior management. It's the way you bring | | | | deliverables and performance? |
| everyone together and get them all on the same page. | | | | What experience do you have in our industry space? |
| While laying the groundwork for a good vendor | | | | Discuss how your company manages its knowledge |
| selection process takes participation, it also takes | | | | transfer and communication to and from our |
| leadership. | | | | company? How does the company ensure its building |
| Prepare the structure | | | | the expected solution? |
| The companies preparing to select an outsourcing | | | | SECURITY |
| vendor face a critical first choice: they can choose a | | | | We cannot stress enough how important the security |
| very structured and efficient process, or they can | | | | measures are for your business. This should be a |
| make it flexible and collaborative. Usually, specialists | | | | critical decision component in the process of selecting |
| advise to choose an interactive process. | | | | the vendor. Find out whether this is a vendor who |
| If you ask a lot of specific questions, you'll get a lot of | | | | ensures your IP with the the security and confidentiality |
| specific answers. This could be suitable for something | | | | of the data you require and all legal and technical |
| like outsourcing mail room operations or janitorial | | | | measures are in place. |
| services, but outsourcing IT, for instance, is another | | | | What security measurements do you have in place to |
| matter. You need an approach that invites feedback. | | | | protect our company’s intellectual property in |
| The best mutually developed solution wins and | | | | respect to information and data? |
| becomes the final bid. | | | | Do you outsource any services? |
| What should you ask? | | | | ! Oftentimes an outsourcing provider will act as an |
| There is no clear consensus about what you should | | | | aggregator of other outsourced service providers. In |
| and you should not ask, but there is some agreement | | | | other words, they may outsource part of the solution |
| that it must be tailored to the project and that it must | | | | to another vendor to reduce costs. If this is the case, |
| be thorough. You must document the scope of the | | | | you may have concerns with data integrity and |
| project and include a comprehensive statement of the | | | | accountability. |
| work to be performed and how you want it | | | | When was your last technological upgrade and what |
| performed. | | | | was upgraded? |
| To avoid later debates, your information request also | | | | ! If the vendor performed a recent material change to |
| should include service-level expectations and | | | | the system, it may not have been fully client tested.) |
| specifications on the contractual non-standard | | | | IP OWNERSHIP |
| requirements or even copies of the contract itself that | | | | You must make sure that the vendor warrants that |
| sets forth how you would govern the relationship. It's | | | | the intellectual property and work deliverables |
| best to have the evaluation criteria determined in | | | | produced for your project is original and doesn’t |
| advance, weighted by the importance of the various | | | | infringe any third party’s patents |
| factors. It's also wise to share the evaluation criteria | | | | Ownership for code, process, hardware, licenses, etc |
| with potential service providers and let them know | | | | Intellectual Property |
| how they will be judged. | | | | PRICE |
| Certain vendor information is basic: name, address, | | | | You should clearly discuss the financial terms of your |
| industry, years in business, and, if they're public, their | | | | outsourcing project. Make sure you don’t pay more |
| financials. After that, you will want to get to their | | | | or less than what you get and that all the payment |
| experience on projects like yours. You should find out | | | | schedule and taxes are covered. Get a flexible pricing |
| about their preferred architecture, development tools, | | | | procedure to better accommodate your needs. |
| methodologies, data bases etc. Also, you need a | | | | However do not let price govern your outsourcing |
| high-level explanation of the implementation phases | | | | relationship. |
| and timetable, the checkpoints, the change of control | | | | Describe the pricing model applied to the project. |
| handoff, the life cycle expectations. | | | | Discuss the cost of agreement, exception costs |
| The working relationship is also critical. The best | | | | based on performance metrics, price stability and any |
| contract in the world is worthless if the relationship | | | | hidden costs;Time accounting;Milestone |
| isn’t working, so deal with the relationship details in | | | | management;Pricing Models proposed;Payment |
| advance. Ask the providers what the ideal relationship | | | | schedule;Taxes |
| would look like from their perspective. You might want | | | | CONTRACT |
| to find out just what they'd expect from you. Also to | | | | Many vendors will submit you a draft contract after all |
| know the proffered size of the project team and | | | | the details are discussed. Still, it’s important to find |
| team ramp-up stages they propose and actual names | | | | out as many as possible about the legal points and |
| and expertise of people that will be working on it. | | | | terms, especially if this is an offshore outsourcing |
| Also, you should settle on an escalation process for | | | | project. |
| mitigating unexpected issues and problems in the | | | | Discuss the major legal points of the contract. |
| project developments. | | | | What are the contract term, expiration, and renewal |
| A good process of selection also anticipates the | | | | options? |
| contract. You should preempt the contractual | | | | PROJECT QUALITY |
| negotiations by requesting as many details as possible | | | | Make sure the quality of the results are guaranteed. |
| about the contractual terms. | | | | The vendor should have standard industry certificates |
| The “Checklist” | | | | to prove the caliber of its services. |
| Although you should adapt this to the specifics of your | | | | What industry standards are used by the company to |
| business needs, the following points need to be | | | | ensure quality and customer satisfaction in the field? |
| thoroughly studied in the vendor selection phases. This | | | | What are the standard quality deliverables during the |
| is to find out more about the company’s culture, | | | | project lifecycle? |
| business model, employees, management, technology, | | | | Elaborate on the reviews, testing, and satisfaction |
| solutions, success, security aso. At the bottom line, you | | | | measurements used by the company. |
| should find out whether this is the right solution vendor | | | | TECHNOLOGY |
| for your company’s needs. Pay attention to the red | | | | If you get an extensive list of the technologies the |
| “tricky” questions that will point out honest | | | | vendor uses you will be able to find out even more |
| answers. | | | | about the expertise, security measures, quality of |
| BUSINESS PROFILE | | | | execution and performance. Also you can get a |
| Try to find out whether the vendor is a trustworthy | | | | glimpse of the compatibility between their tools and |
| company with a sustainable business model. It’s | | | | yours. |
| important to know you are dealing with a company | | | | Describe software domain, applications and |
| that will still be on the market to sustain your long-term | | | | infrastructure expertise of the company. For example: |
| business goals with outsourcing, and that it has the | | | | database, networking, driver development, deployment |
| managerial strength to address your project. | | | | technologies, Web, etc. |
| How long has the company been in business? Of this | | | | Describe the availability of the company software |
| time, how many years in the outsourcingbusiness? | | | | environment such as your databases, application |
| Describe the company's business model. | | | | servers, etc. |
| How large is the company? | | | | Does the company maintain partnership or support |
| What are the company onshore, near shore, and | | | | levels with industry leaders in software? Forexample, |
| offshore capabilities? | | | | Microsoft, Oracle, IBM, Novell, etc. List these companies. |
| What are the company's areas of expertise? | | | | What are some large scale software projects the |
| Describe the company’s financial condition and | | | | company has developed in the past – in terms of |
| funding position. | | | | lines of code? |
| What sets your company apart from other IT | | | | What tools are used by the company in its software |
| offshore outsourcing companies? | | | | lifecycle to author the code, gather and report on code |
| CUSTOMER BASE AND REFERENCES | | | | and quality metrics, defect tracking, and change |
| References play a significant role in deciding whether | | | | management? |
| the vendor has got the expertise to take your | | | | Conclusions |
| company where you want to go. These are the | | | | There is still an uncertain answer to how much detail a |
| factual proves that the company has background in | | | | good RFP should require. Many people seem to think |
| projects similar with yours and that it accomplished | | | | that more is better. They're afraid to leave out |
| them successfully. | | | | anything. But this makes it harder for the providers to |
| Provide detailed histories of the last three outsourcing | | | | respond and harder for you to wade through the |
| contracts for a reference (please include contact | | | | responses to get the information that is useful. |
| information) | | | | Other people think that less is better. The more |
| Case studies | | | | specific they have to be, the more providers will get |
| How long have you provided the proposed service? | | | | discouraged and quit. The RFP should provide a |
| ! Often vendors will list services that are not fully built | | | | measure of self-selection. Let companies take |
| or are relatively new. If the proposedservices/system | | | | themselves out of the running if they don't think they |
| are not fully developed or are relatively new services, | | | | can do the job or present a winning bid. |
| they may not be completely client-tested. You should | | | | A successful selection should narrow the potential |
| look for two years of active use in order to have | | | | providers down to a very short list, ideally just two to |
| some degree of comfort in reliability and usability. | | | | three providers. It's always to your advantage to keep |
| MANAGEMENT | | | | the competitive mindset in the selection process as |
| You must find out how the vendor is going to manage | | | | long as possible. |
| your project. Make sure you get all the attention you | | | | As always stated, outsourcing benefits can provide |
| need by being provided with enough team members | | | | companies the ability to better focus on the more |
| that have the proper managing experience for | | | | important core business. But only careful evaluation of |
| addressing your project effectively. | | | | outsourcing vendors can ensure that outsourcing |
| Describe the composition of a dedicated team. What | | | | provides true organizational value. |