The Short List - Our recommendations. Making sense of all your options Hints for striking a good deal Strategies for service-level agreements Management tips from the trenches

By James Kobielus
Network World, 11/11/96

You've looked at all your options, gone through the numbers six ways to Sunday and reached a definitive conclusion: Outsourcing makes sense. Now comes crunch time - selecting your outsourcing vendor.

The following evaluation criteria are applicable no matter how big or small your outsourcing requirements.

First and foremost, examine the outsourcer's management team because the outfit will only be as effective and responsive as management allows. Interview each member of the team and review their resumes and backgrounds. Determine whether, when and how these particular individuals have worked together in the past.

Other criteria include:

• Financial strength. If the outsourcer is publicly traded - as are most of the companies that accepted our invitation to be included in the chart on page 45 - get their most recent annual report and Securities and Exchange Commission financial filings. If they're privately held, check their credit history and determine whether they have recently filed for bankruptcy protection. Require privately held firms to disclose their ownership structures, investors and lines of credit so you can determine if they have the wherewithal to cover any capital investment that may be necessary to meet your needs. Also find out if they can bankroll what it'll take to rehire some or all of your staff and/or acquire select portions of your network infrastructure.
• Customer references and related industry experience. Ask for at least three customer references on contracts of similar duration, complexity, technical scope and geographic extent. It's especially valuable if the firm can provide references on work performed for others in your industry.
• Skill base, subcontractors and strategic partners. Ask the outsourcer for a corporate skills matrix to make sure it has personnel with the capabilities and experience required to support your enterprise network. Request resumes for chief technologists, as well as for the principals with subcontractors and strategic partners the outsourcer plans to use. Require letters of commitment from all subcontractors and strategic partners affirming their good-faith intentions to work under the contract.
• Geographic scope. Determine whether the outsourcer, its subcontractors and partners have offices in all countries, states and cities where you require on-site support.
• Price. Require outsourcers to prepare cost proposals in a standard format - one you can use to make apples-to-apples comparisons among the bidders on a function-by-function or item-by-item basis.