Discover the Benefits of Outsourcing

	One Company. A World of IT Solutions.
	WHAT IS OUTSOURCING? Outsourcing is the process of delegating services that were previously performed by internal staff to an outside party. The relationship is bound by a contract and usually transfers the management of resources, staffing, and the quality of services provided over to a third party organization. Success depends upon selecting the right applications, providers, and partners, while measuring these services appropriately.		WHAT IS OUTSOURCING? WHY DO COMPANIES OUTSOURCE? WHAT ARE THE BENEFITS OF OUTSOURCING? HOW CAN I BE SUCCESSFUL? WHAT ARE THE COMMON MISTAKES? HOW DO I CHOOSE A VENDOR?
	Typical Outsourcing Models Traditional - Delegating services to an outside party Joint Ventures - a shared investment with a business partner creating a new business entity with its own revenue stream Selective - Outsourcing of non-critical services to a company that specializes in that service Profit Center - IT department spins-off and becomes its own company, sells IT services back to the organization Insourcing - A company which has outsourced, all or part of their competencies, brings it's IT services back in-house Partnerships - a shared investment with a business partner while maintaining separate revenue streams for each organizations ASPs - Outside party hosts or manages applications for an organization Managed Services, “On-demand”, or "Utility Computing" – Service offerings that expand or shrink as an organization’s requirements change. Offshore – utilizing overseas resources as a means to receive good work at reduced rates. Business Process Outsourcing - Delegating back-end administrative functions that are necessary to run a business but don't provide a competitive advantage (billing, payroll, training, human resources, sales, etc.)
	WHY DO COMPANIES OUTSOURCE? Reduce expenses/Increase revenues Focus on core business competencies Align IT strategy and business goals Build world-class processes Improve overall competitiveness Gain access to industry Ensure success/benefits of re-engineering Share/mitigate risk Convert fixed assets/costs to variable costs Consolidation and standardization Eliminate problem areas Information Technology Drivers Access new technologies Improve service levels Enhance capability Supplement IT staff/resources Relieve resource constraints Shorten implementation time Reduce IT costs Access specialized expert resources WHAT ARE THE BENEFITS OF OUTSOURCING? Becoming a revenue center, not just a cost center Improve overall competitive advantage Predictable costs, improved service levels and outcomes - there is more discipline Shared risk and reward through partnerships or joint ventures Better demand management - scale up/down by need Recruiting and retaining quality IT staff by continuing to make technological and clinical advances Reduce and control operating expenses Avoid the expense and responsibility of housing your own technology Allow internal resources to concentrate on strategic initiatives Increase productivity while simplifying your IT operations Operate in an extremely reliable, secure, and technologically advanced environment Expand rapidly to meet growth, without adding staff Bring your site to market in less time and for less cost Access a secure, professional environment for web operations that won't easily fit within your data center A WIN-WIN FOR EVERYONE! HOW CAN I BE SUCCESSFUL WITH MY OUTSOURCING INITIATIVE? Plan adequately for management of suppliers' operations Get advice from an unbiased third party Establish control points Watch for termination and transition problems Make sure all parties are responsible, reasonable, and flexible Think strategically about your prospective partners – is there a cultural fit? WHAT ARE THE COMMON MISTAKES? Not hiring an outside consultant/intermediary to review your current environment, recommend areas to outsource, and identify vendors Believing outsourcing will solve all problems Considering only big names or low rates Transferring key employees to the vendor Outsourcing less, not more Not reviewing the vendor’s financial stability and longevity Outsourcing everything to one vendor WHAT SHOULD I CONSIDER WHEN CHOOSING A VENDOR?* Reliability Trust Technical skills Cost and value Security guarantees Vendor reputation Round-the-clock support Ability to customize solutions and services Industry knowledge SLA’s Financial viability and size Innovation and cutting-edge technology Strategic advice Partnerships with other vendors Range of service offerings Flexible payment arrangements *Data: InformationWeek research “Analyzing the Outsourcers” November 2002 You should also consider a vendor's past experiences and references, their geography, their understanding of your environment, and depending on the outsourcing model you choose, your synergy with the vendor's personnel.