ARE YOU READY TO OUTSOURCE?

Outsourcing Readiness Assessment Check List

By Nick Krym, 2012

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Introduction

Offshore Outsourcing is a powerful tool that if used with skill and knowledge can provide for substantial saving, increase in speed to market, and variety of other benefits.

It also a very complex tool that if used without proper understanding can backfire and result in losses instead of savings and wide negative impact.

This presentation covers the main elements that must be in place BEFORE you start an outsourcing initiative.

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Reasons to Outsource

Compelling reasons to utilize outsourcing are in place. Alternatives to outsourcing have been reviewed and

dismissed. SMART objectives for outsourcing initiative are

established S - Specific M - Measurable A - Actionable R - Result-focused T - Time-bound

Initial project to be an outsourcing guinea pig is identified.

Roadmap for future outsourcing engagements is established.

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Expectations and Buy-in

Realistic expectations with regards to outsourcing benefits are established (not to overestimate) Time to ramp up Initial negative financial impact Potential savings Productivity Impact on communications

Realistic expectations and understanding of outsourcing risk are established (not to underestimate) External – geopolitical, security, IP loss, etc. Internal – staff impact, insufficient funds, etc. Personal – career, lifestyle, reputation

Stakeholder buy in / sponsorship is secured. Executives / Management / Team / Self

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Processes & Procedures

Strong software development lifecycle / methodology (SDLC) is already in place.

SDLC is adjusted to accommodate for outsourcing impact. The systems and tools for supporting distributed

development are in place. Distributed version control system Continuous integration and Build automation Defect tracking / IT ticketing system Requirements management tools Information distribution/knowledge sharing Project management and time tracking

Metrics framework for controlling your outsourcing engagement is established.

Program management / project management processes, procedures and personnel are in place

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Finance and Legal

Funds to cover the cost of establishing outsourcing are in place. Vendor search Start up and Ramp up Retention activities Operational impact Change management

Funds / budgets for running outsourcing engagement are in place. Program Management / Governance Travel & Living Expense Budget Financial incentives for offshore team

Draft contractual framework and legal support for contract negotiations are in place.

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Risk Mitigation

Generic outsourcing risks and risks specific to your organization are identified.

Risk mitigation plans for each of the risk are established.

“Roll back plan”, plan for a recovery from an outsourcing failure is developed.

Staff with experience in running outsourcing engagements is in place.

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Conclusion

Moving forward with your outsourcing initiative without all items in this checklist in place is a very risky proposition, likely a disaster waiting to happen.

Before going forward with your new outsourcing invest in learning about the subject to avoid common mistakes and get the most of this powerful tool.

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Author

Nick Krym is a technology professional with 25+ years in the IT industry—20 of those in offshore outsourcing with companies and freelancers from Asia, Latin America, and Eastern Europe.

Nick shares his experience and ideas in a popular blog pragmaticoutsourcing.com and is the author of Outsource It! Find the book on http://pragprog.com/book/nkout/outsource-it

Feel free to contact Nick at krym2000-po @ yahoo.com