Information technology (IT) outsourcing is a strategic business asset, but a company must follow some “golden rules” when choosing an outsourcing provider, said Phil Varney, senior vice president, Global Solutions, BT Americas, during remarks at the Gartner Outsourcing Summit.
During his presentation, “The Golden Rules of Successful Telecommunications Outsourcing”, Varney offered his perspective.
“First, select your outsourcing provider carefully,” Varney said. “For each provider you consider, thoroughly evaluate their capabilities, experience, financial stability and product offerings as well as the pricing, benchmarking and contract provisions offered.” He also noted that one of the most important ways a company can optimize savings through outsourcing is to set a realistic baseline for internal costs. “Work closely with your provider to build your business case to maximize success and prevent surprises down the road.”
Varney also emphasized that viewing technology as an asset rather than a cost is at the heart of successful IT outsourcing contracts. “Establish technology and transformational planning principles at the start,” he said. “Develop a roadmap that links business requirements to technology developments, and vice versa, and review these requirements internally and with your provider every six months.” This practice, he said, helps ensure operational flexibility and performance optimization.
The governance process is also key to a successful outsourcing arrangement, he said. “At the very start of the contract, set an escalation process for effective resolution of any service problems,” Varney said. “Allow the provider to handle the complexities of the contacts while you focus on the deliverables.” He emphasized the importance of creating and then monitoring service levels as well as other critical performance and financial milestones on a continuous basis in tandem with the outsourcing provider.
“Industry experts project that business process outsourcing will continue to grow in the months and years ahead as more and more companies recognize the value of outsourcing to their bottom-line financials and service performance,” Varney said. “Understand what outsourcing really means to your business, design and negotiate your contract accordingly and then continuously monitor deliverables to ensure profitable results and sustained value from your outsourcing investment.”