AXXCON Outsourcing

IT outsourcing: Identifying the right provider – what you should pay attention to

Have you decided to outsource? Then it’s about which external (IT) service provider to consider and what you need to do in order to prepare for outsourcing. In this article, I will give you a few hints which points you should be aware of.  

The reasons for outsourcing and the services for which the benefits prevail have already been explained in a previous article. Read this article here >

Résumé: Services that can be standardised or belong to the standards, however, do not belong to the core services of a company, are most likely better in the hands of outsourcing providers. HR, accounting, logistics or sales are just a few examples. If these services are part of the service provider’s core services, they can be handled more efficiently and cost-effectively.    

In order to remain satisfied with your decision for a long time, you should consider the following points when choosing your service partner and during your preparations:  

  1. 1. Which competencies are necessary for the task?

  In advance, prepare a list of the skills needed for the outsourcing task. This list should also include services which are becoming more and more important and which are not available or only rarely available in your own company. Digitalisation should definitely be one of them. Especially in medium-sized companies, digital heads are still rare. Outsourcing a few IT employees for a new task initially means training, high costs and also that daily operations can no longer be guaranteed.

 
  1. 2. Do not forget to prepare your employees as follows

Outsourcing does not mean “out of sight, out of mind”. You may outsource tasks and processes, but not responsibilities. You should be familiar with the tasks that you outsource. This facilitates the subsequent management and control of external service providers in order to achieve the desired quality. Especially those companies that are preparing to outsource for the first time are recommended to work with a sourcing consultant. In the beginning you will rarely find employees who can take over this control.  

  1. 3. Does the service provider fit to me?

Good cooperation always depends on the chemistry between two partners. On the one hand, the service provider should be familiar with your industry and be able to present references. On the other hand, culture also plays an important role. Does the size of the provider fit to your requirements and do the providers have the resources to meet them? A smaller, regionally operating service provider will face great difficulties in meeting the requirements of a global corporation.  

  1. 4. What if it escalates?

This might sound negative now, however, think about the outcome right from the beginning. Of course, the cooperation with an external service provider should last for several years. But it may happen that the cooperation has to be terminated for some reason. These cases should be sufficiently considered and recorded in the contract as exit regulations. Also, being aware of the sales volume of the service provider is not a disadvantage. If outsourcing volume accounts for only a small proportion of total revenue, the service provider may not be prepared to respond to an escalation.  



If you need advice on your current situation or you are looking for a sourcing consultant, do not hesitate to contact us. Torsten Beyer is a partner at AXXCON and an expert for sourcing projects. He supports companies in preparation and selection of adequate partners as well as in contractual arrangements.

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