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OFFSHORE OUTSOURCING- VENDOR EVALUATION PROCESS

Vendor evaluation is the most important stage for successful outsourcing initiative. Before an organization decides to outsource it has to be absolutely clear on what to outsource? How to outsource? And more significantly, why to outsource? Resource allocation to an outsourcing decision process can be decided based on the contribution of the business processes in the overall business subsistence and organizational growth.

Ideally a vendor evaluation process includes these steps: looking for an offshore vendor, contacting the vendor, extracting and interpreting information from the short-listed vendor, interacting with offshore vendorís clients, detailed analysis of vendor processes & infrastructure, requesting a quote and deciding the final vendor.

But, taking a decision for outsourcing to an offshore vendor demands extra caution, and the outsourcing decision process is different from normal processes. Following are the essential steps you can include in your offshore vendor evaluation process:

  1. Evaluate vendor country:
    Scrutinize the political and economic climate of the vendor country. Understand the political inclination, economic policies, and IT policy. Clarity on the judicial system is also imperative to hedge your offshore outsourcing risk. Look at the future of offshore outsourcing in the nation where the offshore unit is located. One could refer to the sovereign ratings offered by various independent organizations, as macro environment created by economic and political policies will largely affect the feasibility and financial viability of offshore outsourcing.


  2. Know the vendor better:
    Understand the goals, objectives, mission and vision of the offshore vendor. Be convinced of the vendorís short-term, medium-term and long term business philosophy; after all you do not want to change vendors frequently. It is always a good idea to be convinced about the leadership. Synergy in goals is an absolute must for sustainable offshore relationship. Evaluate their willingness to adopt your standards and processes.


  3. SWOT analysis:
    Conduct a detailed analysis of personnel skill sets, technology infrastructure, privacy protection, quality control processes, confidentiality measures and other systems as per your requirements. Factors like crisis management strategy and redundancy plans of the vendor are critical for your business continuity. At this stage do visit the potential vendor, and verify the credentials.


  4. Financial Analysis:
    Every offshore outsourcing decision process revolves around cost savings without compromising on the quality. Financial analysis should be done based on the total costs to you vis-ŗ-vis the expected goals. Calculate financial risk depending upon the back up strategy adopted by the offshore vendor.


  5. Selecting the offshore vendor:
    A contractual binding completes the vendor evaluation process. For effective offshore vendor management, a contract should clearly define the roles and responsibilities, timelines, financial details, payment modes, quality standards and other details necessary for better offshore vendor management. Clearly defined SLA (Service Level Agreement) and a termination clause are also an integral part of the contract.

Successful offshore outsourcing relationships facilitates harnessing the vendorís strengths to deliver results in line with the offshore outsourcing companyís business needs. One time tested model, which ensures the benefits of offshore outsourcing, whilst minimizing the risks associated, is the Global Delivery Model.

 

 

                                                                   

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