How To Choose The Right Outsourcing Provider ?

There is certainly no denying the potential benefits that can be derived through outsourcing, but it would help if the right outsourcing provider is selected. Doing that is not a difficult task, but it's certainly a bit complicated, obviously because the number of providers offering outsourcing services has increased significantly in recent years. Outsourcing mostly involves handling non-core processes, but since it directly affects customer satisfaction levels, the quality of offered services cannot be compromised. Deriving cost savings may be the primary objective, but since improving quality and efficiency are equally important, it's understandable that choosing the right provider will greatly help in these matters.

So, how exactly can a business ensure that the selected provider is the right one? Well, the first thing businesses need to do is contact as many providers as humanely possible. They should inform each of these providers about their specific needs and requirements and consequently request service quotes from them. After this, businesses just need to compare the offered quotes and see which provider best fits the bill. Once that is done, they need to analyze the track record of each of the providers, to make an assessment of their domain experience and expertise.

Based on the above described criterion, each of the providers can then be ranked accordingly. The provider who gets the top rank should then obviously be the preferred choice. This process needs to be followed every time, especially if the objective is to select the most appropriate outsourcing provider.

Offshore outsourcing set for a big year

Research firm Gartner published a study Monday saying "offshore outsourcing isn't as widespread as people think," with lower-cost locales accounting for less than 3 percent of money spent on global information technology services this year.

Gartner projects that figure to grow but remain a relatively small fraction of total spending. By 2008, spending on IT services delivered through "global sourcing" will reach about 7 percent of a $728 billion total market--or roughly $50 billion.

A more bullish view came Thursday from NeoIT, a consulting firm that advises clients about offshore projects. NeoIT "foresees a big year for offshore outsourcing growth in 2005" and predicts that more than "80 percent of the Global 2,000 will have an offshore presence by the end of the year."

Although the studies do not necessarily contradict one another, their differing tones reflect a broader set of conflicting opinions about the hot-button topic. Comprehensive information about the scale and impact of offshoring has been lacking, but Congress recently passed a bill that would set aside $2 million to study the issue.

Defenders of sending high-skilled work to countries such as India and the Philippines say it ultimately benefits the U.S. economy and its workers. Critics claim that the practice eliminates well-paying jobs and threatens the nation's long-term technological leadership.

Although wages can be much lower outside the United States and Europe, the overall effectiveness of shipping work abroad has come under scrutiny.

"Over 40 percent of offshore initiatives will not yield anticipated savings, scale or risk diversification," NeoIT said in its predictions for 2005. "The key reason for these disappointments will not be due to supplier capability but buyer preparation and management."

Despite predicting a large proportion of deal duds, NeoIT said it "sees increasing acceptance for offshoring as a foregone conclusion for multinational corporations that must keep pace with global competition, global supply and global delivery models."

Although much attention has been put on the way offshore projects can eliminate U.S. jobs, Gartner's report indicated that tech professionals should be more concerned with the growing automation of computer systems. "Utility computing will have (a) greater job impact than offshore outsourcing," the report said.