Considerations Before Choosing and Outside Supplier*

• Are you compatible with them?

• Do you share similar business values?

• Are they committed to seeing the business relationship work?

• Has a level of trust developed between you?

• How quickly can they execute the project?

• Can they respond to rapid market changes?

• Can they be an agent of change within your organization?

• Will they deliver continual value over the life of the project?

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Internal Company Problems Encountered When Outsourcing*

• Insufficient staff to manage activity.

• Poor communication.

• Unclear definition of core competencies.

• Simplistic views of outsourcing.

• Lack of clear outsourcing strategy.

• Lack of management training.

• Difficulty keeping staff current on latest trends.

• Undefined specifications.

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Problems Clients Have with Contractors*

• High staff turnover.

• Poor project management skills.

• Lack of commitment to industry or client.

• Shallow expertise.

• Insufficient documentation.

• Lack of control.

• Poor staff training.

• Complacency over time.

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Problems Contractors Have with Clients*

• Poorly defined specifications.

• Strict focus on saving money.

• Lack of clearly defined performance measures.

• Micro-management of project or activity.

• Lack of long term commitment.

• Insufficient understanding of processes.

• Internal politics.

• Unrealistic expectations.

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Ways to Achieve Successful Outsourcing*

   Before you seek a supplier:

• Identify core competencies.

• Define outsourcing objectives.

• Formulate base performance measures.

   While you seek a supplier:

• Research best industry practices.

• Assess supplier offerings.

• Identify suppliers that compliment your business.

   When making your choice:

• Choose the supplier that matches your needs.

• Choose the supplier with whom you can build a trusting relationship.

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Ways to Measure Success*

   Initiate more frequent performance reviews:

• Keep suppliers fresh and responsive.

• Identifies problems more quickly.

   Develop new, operations-focused metrics:

• Is the supplier complementing our organization?

• Have they taken ownership of the project?

• What is their level of expertise?

• Are they willing to share risks?

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* Source: Kenna Amos, “Inside or Outside, users always need an edge,” InTech Magazine, (December 1999)