Sunday, September 17, 2006

10 Biggest Concerns of a Customer While Outsourcing

While looking at Outsourcing your business processes, there are a host of issues that you need to be aware of about your prospective service provider. The key is to choose a service provider with integrity, honesty, efficiency and great communication skills. Although this seems like a formidable challenge, it’s pretty easy if you ask the right questions.
This article will give you an idea about the kind of questions you should ask your prospective service provider before Outsourcing your work.

1.How reliable is the vendor?

Ask the vendor for details such as number of years in business, number of employees, financial background and so on. Get a thorough picture of the vendor's history.

2.Does the Vendor provide quality products/services?

Vendors need to provide solid customer references as well as emphasize the processes that are followed within their organization to ensure quality products and services. Certifications such as ISO 9000 and CMM from independent agencies go a long way in providing customers with this assurance.

3.What is the Life Cycle cost of the Products/Services provided?

Cost is obviously a key reason to outsource. But while choosing a service provider, make sure you look at hidden costs from maintenance, connectivity/infrastructure, training, transition etc. instead of just the obvious costs such as licensing and consulting costs.

4.Will the vendor be able to meet delivery deadlines?

Make sure vendors promise realistic commitments taking care not to overstretch resources to a point where quality might suffer.

5.How safe is my data?

While addressing these data privacy related concerns, make sure your vendor meets your requirements in critical areas related to infrastructure security (Firewalls, Access Controls, Data Encryption, etc) as well as those that are human resource related (Pre-Recruitment checks, Non-Disclosure agreements, etc.)

6.What kind of risk am I taking on with this vendor?

Ensure that vendors provide evidence of Business Continuity/Disaster Recovery plans and risk mitigation plans. These arrangements go a long way in minimizing business risk.

7.What are the effects of the vendor’s employee attrition on me?

Ensure that vendors have cross-trained employees and have maintained sufficient buffer capacity to take care of such events.

8.Will the vendor be fair and transparent in his financial dealings with my organization?

Vendors need to be fair in matters related to invoicing especially in Time and Material type of contracts. Again, check with previous client references to ensure that the vendor is fair and transparent in his financial dealings.

9.Does the vendor comply with statutory laws and regulations?

If your vendor is not compliant with statutory laws, you stand a chance of being held responsible for violations of laws or regulations carried out by vendors. Increasing public scrutiny has ensured that customers are morally, if not legally, responsible for their vendor’s actions with respect to environmental damage, working conditions, etc. Therefore, make sure that none of the vendor's actions violate established laws.

10.Does this vendor’s culture match that of our organization?

A certain degree of ‘fit’ must exist between the two organizations in terms of work ethics and culture for smooth interaction. The best indication of this is your vendor’s initial communication with you.