Sunday, June 19, 2005

Eye on offshoring: Accessing the suppliers

From: computerworld

Recognizing the current state of flux of offshoring, key characteristics that must be understood in detail for each supplier under consideration include:

  • Multinational capability. Are services located in one country or even one city, or are they diverse on a global scale?
  • Partnerships/use of third parties. What are the key partnerships the supplier has formed? Does it have offshore partners it will outsource work to?
  • Turnover rate. Many call centers in India are experiencing a turnover rate of 50%, and application development centers are experiencing 15% to 25% turnover. Obviously, the lower the turnover rate, the more stable the environment.
  • Technical infrastructure. What is the composition of the supplier's technical infrastructure and support structure? Is its support plan standards-based
  • Business continuity and disaster recovery. What is the plan, and has it been evaluated lately?
  • Security. What is the security plan, and has the supplier recently conducted a risk assessment? If so, how often does it assess its security posture?
  • Service-level agreements. Does the supplier tie all of its SLAs to the delivery of the product, or is the SLA modularized?

Different companies will have different comfort levels with the answers to these key characteristics. To reinforce the point; the key to successful offshoring is a well-defined, executable strategy and governance plan. Using a supplier-independent consultancy to select the most responsive and responsible supplier of offshore service will help guarantee success.

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