The competition in today's economy is fiercer than ever and IT organizations globally are searching for strategic methods to drive out cost, time and effort. Many organizations are becoming laser focused on their core business and the activities that are required to make them successful in the current competitive landscape. With many organizations cutting staff, there are less and less resources available to support the corporate strategic initiatives.
It is well known that outsourcing non-essential business processes and operations has become a significant trend over the last several years. In fact Bruce Caldwell, a principle analyst with Gartner, believes that companies can generate upwards of 20-30% cost savings on internal operations through outsourcing. This can represent a substantial savings to an organization which cannot be easily ignored.
Outsourcing your help desk can appear to be an easy answer for reducing cost and improving service levels, however, there can be a dark side to outsourcing. There are significant challenges to finding the right vendor, ensuring a smooth transition and understanding the expectations and true costs. So how do you make sure you will gain the benefits of outsourcing and avoid the pitfalls? We have done the research and drawn from our own experience to bring you…
The 11 biggest mistakes companies make when choosing an outsourcing provider and how to avoid them:
1. Not understanding your business and its core competency Whether your organization is in health care, manufacturing, finance or sales - all businesses have components that are core to the business. These components go far beyond customer satisfaction, such as having email capabilities or internet access. For example, the primary focus of health care is overall patient health and well being. Data records are vital to patient health and confidentiality. Having them available and protected for care is essential to the organization, whether those records are electronic or paper. Data Protection and Recovery in health care is a core component to the business and essential for the IT organization to maintain thus can and never should be outsourced. Knowing what's core to the business will also identify areas that are not critical, such as desktop management or hardware repair. Understanding the vital business components that IT must not only support but be key stakeholders in will allow the IT group to shift resources to the areas that allow IT to be a strategic asset rather than a cost center.2. Not taking the opportunity of looking at outsourcers to get an expert assessment of your current situation in order to properly diagnose your needs and propose a customized solution. Any vendor can provide services that are within their own core competency, but each organization is unique with specific challenges. A vendor relationship must be managed from all parties involved, and each side must have a vested interest in a successful implementation. Instead of locking into a particular workflow or methodology, a vendor should focus a great deal of time and effort into the transition methodology prior to taking the "first call". Transitions can take anywhere from 30 days to 6 months, depending on the complexity of the organization. Getting a smooth transition from initial discovery to a steady state is perhaps the most important component to a successful implementation.
3. Not choosing a provider with a strong, well-defined IT service delivery model including complementary services available in case additional outsourcing is desired/ needed at a later point. This is related to choosing based on price. Chances are the low cost providers are also low on the experience/ service delivery sophistication spectrum. Your long term success will depend on choosing a reputable, expert partner with both depth and breadth of experience with many different clients and a proven service delivery model that works across all situations.
4. Locking your company into a multi-year contract with large termination fees. More than one company has entered into an agreement with an outsourcing provider only to discover later that they were stuck paying outrageous prices for subpar services and there was nothing they could do short of forking over exorbitant fees in order to terminate the contract. Make sure you negotiate an out-clause that won't hurt your bottom line.