The article, “Multi-sourcing –Minimizes Risks Associated with Large Global Sourcing Contracts,” discusses some of the key benefits of smaller deals.  For example, it is difficult to find one vendor that can successfully provide a variety of services.  When smaller deals are made with multiple vendors, the IT company has access to a wider range of resources and expertise.  In addition, it is easier to sever an outsourcing relationship when there is a smaller deal, as the IT company can avoid becoming dependent on the vendor.

Shorter-term contracts help alleviate some of the anxiety associated with global IT sourcing.  The majority of IT agreements last anywhere from five to fifteen years.  With a shorter-term contract, IT executives can feel more comfortable knowing that if the arrangement is not what was expected or if outsourcing is no longer a good fit, they are not locked into a long-term contract.

The recent economic uncertainty has also caused more IT executives to take their time in signing outsourcing contracts, which has led to longer negotiation cycles.  Even though IT companies are looking for ways to quickly cut costs, a goal that can be accomplished with global IT sourcing, at the same time, these organizations are measuring the risks and benefits.

When an IT company begins considering global IT sourcing as an option to reduce costs and increase productivity, executives need to think about the goals for the upcoming year or more.  A quick decision should not be made just to reduce expenses.  Global IT sourcing has a lot to offer, but it is not a good fit for every company.  Once the decision has been made to outsource, it is difficult to come back from it if the firm changes its mind.  A global sourcing strategist can help organizations weigh the benefits and risks of global outsourcing.  Contact A&E Consulting, a full service consulting firm, at 661-200-3612 or info@AandEConsulting.com for more information.

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Quality assurance testing will confirm that all functionality, security and scalability issues have been addressed based upon the system requirements.  This testing should be done for every process that is developed through global sourcing or in house.

The most common causes of code errors have to do with the IT vendor.  The vendor may have lacked its own quality assurance team or assumed the outsourcing company would handle quality assurance testing in house.  The project could have had a tight deadline and the vendor rushed through a quality assurance check or may have skipped it all together.  Vendors also may misunderstand the system requirements, which would lead to inadequate testing.  Whatever the reason, poor quality assurance can greatly impact a project.

Before signing a contract with a global sourcing provider, it is important to find out what type of quality assurance system has been established.  Is there a quality assurance team?  What processes are set up to correct code errors?  How is the software being tested and does it include the end-user experience?  Another key fact to uncover is whether the quality assurance testing done by the vendor is comparable to that of the outsourcing company.  Many vendors have quality assurance teams that work with the developers to test the software. 

It would be ideal for the global sourcing provider to conduct regular inspections of the software as it is developed.  Inspections can be done at every stage of the development process and can include technical peer reviews of software designs and implementations.  By conducting these inspections, schedule delays can be avoided and costs can be better controlled because problems would be detected early.

When choosing a global sourcing provider, take the time to review its quality assurance system.  By carefully evaluating a vendor’s quality assurance processes, outsourcing companies can avoid waiting until software is released to discover it has code errors.  A&E Consulting can help you choose a global sourcing provider and will oversee your first outsourced project.

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It is common for an outsourcing company to not place a high priority on communication.  When communication goes wrong in global sourcing, cultural differences are often blamed.  However, usually there is more to it than just cultural differences.  If information cannot be communicated to the correct people, at the right time, there is a strong potential of the project being delayed or not properly developed.  Before a project is sent to a global sourcing provider, a communication plan must be created that will address how and when communication will take place.

Establish a communication infrastructure.  Will correspondence take place via email or telephone?  Who is the point of contact?  When communicating with the vendor, it may be wise to invest in high quality digital communication lines, to ensure a clear connection.  Some outsourcing companies have also found it helpful to create a toll free number that can be used for team members.  Direct telephone numbers and extensions, plus email addresses should be exchanged among those involved in the project.  By having an established communication infrastructure, team members will know how to contact each other and there should be minimal to no delay in relaying information.

Determine the frequency of communication.  How often should virtual meetings take place?  Who should be included in each meeting?  As the global sourcing provider and outsourcing company work together, it is important to determine if regular conversations will occur, which will go over the project status and address any issues that may have arisen.  The frequency of such meetings should be determined in advance to avoid any complications or schedule conflicts.  This interactive communication will effectively relay pertinent information to those involved in the project.  After a team meeting, there should be some type of follow up report, outlining what was discussed in the meeting.  This information should be dispersed to the meeting participants.

Create methods for communication.  In addition to telephone and email, what other methods will be used in communication?  Status reports, newsletters and Intranets are all helpful tools for communication.  A dedicated Intranet can be used to communicate project goals and expectations to ensure the success of the project.  However, whatever method of communication is used, it is vital that all team members and project managers read the information.  Even though a lot of effort may be put into creating great information, if it is not read, it is useless.

There are many additional ways to overcome communication barriers.  A&E Consulting can help you create a communication plan and choose the right global sourcing provider.  We will also assist you with your first outsourced project.

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