4 components of IT outsourcing strategy

When a company opts for outsourcing, designing the right IT outsourcing strategy is essential for ensuring the long-term success of such a partnership. Thus said, the business must determine the 4 main components of a successful IT outsourcing strategy and execute them correctly. We list these components and briefly describe them below.

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How to ensure your actions actually provide benefits for your business? By following the correct IT outsourcing strategy! Below we list 4 crucial components of how to ensure your IT outsourcing cloud computing project drives value to your company.

  1. Determine your goals
  2. Write down clear project requirements
  3. Measure current performance levels
  4. Select appropriate KPIs

Let’s take a closer look at what each step includes.

Determine your goals

There are multiple outcomes the businesses want to achieve when outsourcing IT operations:

  • Lowering the expenses
  • Increasing profits
  • Instant access to a large talent pool
  • Cost-efficient allocation of internal resources of the company
  • Speeding up the software delivery workflows
  • Reducing CAPEX

While forming these objectives, a company should define several limits, according to the latest IT outsourcing trends of 2019, like:

  1. Should the core business functions be also outsourced?
  2. What mission-critical processes can never be trusted to an IT outsourcing company?
  3. Should the in-house team benefits be cut after outsourcing?
  4. Should all the IT outsourcing services be provided by a single company?

Once you form the opinion on these points, you can come up with the list of IT outsourcing project requirements.

Write down clear project requirements

You should hold several missions among all the business stakeholders to determine their expectations from outsourcing IT operations to a third-party provider. This will help form a holistic picture of the problems at hand and expected partnership results, so these might be turned into contract terms. It is important to ensure these decisions are made according to the expectations of all the relevant team members and will benefit your business.

Measure current performance levels

When the business knows exactly what time and budget expenses are involved in every operation, it is possible to select these values as a baseline to be able to track the improvement. It is also useful to compare your business results with top-performers to measure the gap between these values and set realistic KPIs. If current expenditure volumes cannot be easily evaluated, these parameters are assessed during the initial stages of IT outsourcing and used to evaluate the progress.

Select appropriate KPIs

To be beneficial for your business, IT outsourcing contract efficiency should be measured according to easily assessable and understandable Key Performance Indicators or KPIs. These are often expressed in numbers and represent the following processes:

  • Service quality
  • Customer satisfaction percentile
  • Timely task resolution
  • Income sums
  • Speed of response
  • Collaboration flexibility

Each of these KPIs can be measured according to a certain metric and certain tools should be put into place to collect and process this data. The results of each metric can then be compared to the desired levels to evaluate the efficiency of IT outsourcing company services.

Final thoughts on 4 pillars of efficient IT outsourcing strategy

This simple checklist will help you form and execute a traceable and transparent IT outsourcing strategy. This will help your team concentrate the effort on crucial business aspects while retaining full control over the IT outsourcing company and adjusting their performance should the need arise.