Selecting The Right Outsourcing Model
Like many of today’s managers, you’re probably being asked to do more with less—a lot less. This isn’t always easy—especially in IT where resources are often limited.
So you have to be selective when it comes to projects. You also have to make ample use of all the tools at your discretion, like outsourcing.
Outsourcing offers numerous benefits. One is freeing up resources that you can re-invest in projects that dramatically enhance business value.
The key to succeeding with outsourcing is selecting the right model for you project. Choosing the right model not only cuts cost, it also maximizes your return on investment.
To select the right model, you first need to take a hard look at your business. Having picked a model, you then need to decide on the right model for your business situation and the right partner as your provider.
Types of Outsourcing Models
Outsourcing models fall into one of three categories. They’re either personnel, function, or project.
- The Personnel Model is outsourcing’s most basic form. With this model, you use outside personnel to perform a task without adding internal resources to the mix. Generally, an account manager independently manages the personnel involved. Bringing in additional help to backfill on basic duties during a project rollout is a good example of this model type. Flexibility is this model’s biggest advantage.
- The Function Model allows you to break off an IT task and hand it off to an independent provider. This model works best for compartmentalized responsibilities that can be grouped individually and require little collaboration with internal functions. Help desk support is a good example of this model type. Cost reduction and efficiency are this model’s biggest advantages.
- The Project Model features a start and end point as well as a set of deliverables. These projects are one-time engagements that require skill sets your department lacks. This model also includes those instances where you don’t have the manpower to accomplish what you want, yet still must handle core responsibilities.
Projects where a temporary spike in IT services is needed but hiring additional people is out of the question are good examples of this model type. Getting the job done quickly is this model’s biggest advantage.
All three models are viable outsourcing alternatives. Which model you choose depends on the your particular business situation.
More Selection Considerations
While type is the main consideration when choosing an outsourcing model, it’s not the only one. Two other considerations include the business objectives you want to accomplish and the impact your service provider will have on internal workflow and productivity.
Additional considerations that can influence model selection include the project’s impact on the company’s overall success, the risk/reward level of handling the project internally versus outsourcing it, and the expected return on the project’s investment.
Then there’s price. While the price you’re willing to pay considering outsourcing models, quality, responsiveness, support, and expertise also factor into your decision. In fact, these things may be even more of a factor than price when it comes to choosing the right model.
Identifying The Right Partner
Once you’ve determined the right outsourcing model, you need to identify the right provider for your project. You’ll want a provider that can do the job better than you can, preferably one with a history of succeeding in similar situations.
Size is also a consideration when selecting a partner. A smaller provider may provide greater attention to its clients. But a larger provider can offer you more firepower and be more financially stable. Often, a medium size provider is best if you’re an SMB.
Whatever size partner you choose, make sure you’re comfortable with the firm and its people. Depending on the project’s length, you may be working with them for a long time.
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