Best Practices In Outsourcing
Aligned With Industry Standards

There are a number of best practices in outsourcing. Many of them deal with the building of your IT outsourcing business plan, and selecting your service provider. We're going to focus on the top 14 issues.

1. Clearly define the scope and schedule of this project in your business plan. Define your requirements. Be accurate and provide complete information. Why? Because it ensures that you'll receive a realistic proposal and reasonable pricing from your outsourcer. If the scope is not well defined, it can lead to conflicts later in the process.
2. Evaluate your outsourcer in the same way you do when hiring full time employees for senior positions in the company.
   1. Ask direct questions.
   2. Make sure they have the required experience and expertise.
   3. Check their references and make sure you get feedback directly from these references.
   4. Do you have any concerns? If so, make sure you get satisfactory answers and if necessary ask for concrete examples.
3. Make sure they have the specific experience and expertise you need. You don't want to be this outsourcer's first project. Follow best practices in outsourcing!
4. Do not select an outsourcer based solely on price. Consider discarding the highest and lowest priced proposals. Make sure you strike a balance between value, quality, experience, expertise.
5. Make sure their previous work meets your expectations for quality and service. One way to do this is by asking them to submit a rough outline or plan of how they will work for you. Why? Because this will show you if they understand your requirements and you'll get a better idea of how they'll handle your project.
6. If this is your first time working with this outsourcer, start with one part of the overall project so you can judge their capabilities, best practices, expertise. It will paint an excellent picture of how they'll perform for the duration of the project.
7. Establish clearly defined milestones and checkpoints that will enable you to evaluate their work. These milestones can also be used to set up payment schedules.
8. Make sure it's clear who owns the resulting work/products and key components of the product. It's also important that you clearly define how you intend to use what they deliver.
9. Ongoing support. This must be defined before the project begins. Don't wait until the project is complete or operational. Why is this important? Because as your business plan evolves, so will your relationship with this outsourcer.
10. Get absolutely everything in writing - the service agreement, the scope, deliverables, ongoing support. Both parties must sign off on any agreement changes. Some may not think this next point is not an important part of best practices in outsourcing, but keep copies of any email exchanges between both of you.
11. Ask your service provider about their documentation practices. Ask to see copies of their documentation from previous projects. This is important as it will show you more about how they work and what you can expect to receive from them.
12. Your service provider should prepare their own requirements document. Ask to verify it to make sure it reflects your needs. It also confirms their understanding of this project.
13. Communication is extremely important. Make sure your provider has clear and excellent communication channels at all levels. Insist on meeting with their staff to be assigned to your project and interview them as if they were to become an employees within your own organization.
14. Make sure the service provider understands your business model. You want someone who can see the bigger picture of your overall business and is providing a solution that truly helps your organization to obtain those goals.

How To Get More Help

In preparing this list of best practices in outsourcing, we referred in part to two authoritative IT outsourcing books co-authored by associates of our team and one of our site sponsors.

We developed the format in an exhaustive, easy to read format, so you won't get bogged down in details while browsing this site. But there is extensive in-depth information for you on best practices in outsourcing available in the two books, if you want or need it.

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