Outsourcing to a Vendor:
Risky or Rewarding?
It's all about how you assess the vendor's knowledge,
credibility and value. -- Vyoma NaIr
You have decided to outsource certain functions to an exter-
How transparent are their operations?
nal provider. You now have the problems of finding the right
The provider should be sufficiently confident of their exper-
vendor, especially since outsourcing relations often trans-
tise and processes to allow you to audit their work on their
late into de-facto partnerships. If things go wrong, mission-
premises whenever you want.
critical IT systems, intellectual property, customer opera-
tions, and possibly millions of dollars in project reallocation
What contingency or disaster recovery plans do they have?
can be at stake.
This is especially important if there are time-critical jobs you
are outsourcing. For example, if you are outsourcing contract
Here are a few tips to choosing the right partner, based on 15
testing, they should have provisions for situations like failure
plus years experience with our clients.
of back up equipment. And if there is a staffing or other prob-
lem in one office, they should have another office(s) to which
Is the service provider(s) financially stable?
they can immediately allocate work.
You do not want your provider going out of business half way
through a project. Check how many years they have been in
Are you getting the intangible extras?
business, whether they have ever declared a group company
A quality service provider does not simply stick to the let-
bankrupt or put it into receivership. This is especially impor-
ter of the contract and offers many extras. For example,
tant if the provider may be handling your money.
a quality organization with an internal audit department,
could share the results of the internal audit on your
Do they have the quality standards you require?
account free of charge. They could offer data easily inte-
If your company is required to abide by quality standards
grated into your own IT system. Alternatively, if they are
such as the AICPA's Statement of Auditing Standards 70
sufficiently experienced in different systems, they could
(SAS70) for accounting, then it is advisable for your provider
use your systems.
to be similarly certified. If they are not, you may wish to make
it a requirement of the contract that they obtain the certifica-
For help in choosing the right outsourcing partner, consult
tion at their own cost.
with an expert at www.youroutsourcesolution.com
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