Tuesday, September 06, 2011


Thoughts on IT Outsourcing and Vendor Selection

Many enterprises have a rigorous procurement process that requires the creation of lots of documentation ranging from Request for Information (RFI) to Request for Proposal (RFP). These documents tend to be governed by Procurement policies which serve to eliminate bias, yet many of them are fundamentally flawed in how they approach IT Outsourcing and lack conceptual integrity...

How many people noticed that I used the word vendor, when it would have been more appropriate to use the word partner? It is important at early stages to look at potential vendors as partners. This may establish a framework in allowing all parties to define longer-term sustainable values instead of focusing on the details of a given transaction.

Part of creating the short-list will be to filter based on sage wisdom from industry analyst firms who rate vendors on a variety of easily discoverable but otherwise suboptimal attributes. At this stage, it is vital that an enterprise buyer understand more about the vendor beyond just their growth patterns, revenue and headcount. A wise CIO will spend time understanding the vendors ability to demonstrate technology leadership across a lifecycle of hardware, software and services regardless if they are solely focused on procuring just a services arrangement.

Many CIOs put their enterprises at risk by not spending more time in understanding the footprint of their partner. Let's face it, while India has the most people, this country also has the biggest potential for increased inflation which over time will erase any savings that could come from labor arbitrage. It is prudent to look beyond India and understand delivery capabilities from countries in Eastern Europe, South America and the continent of Africa in order to truly spread the risk...

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