Plan site visits to select offshore providers

IT directors considering outsourcing abroad should look beyond the sales team's pitch and visit the supplier's site to discover...

IT directors considering outsourcing abroad should look beyond the sales team's pitch and visit the supplier's site to discover its real strengths and weaknesses.

When choosing an offshore supplier, a site visit is an essential part of the selection process. If you have already received a dozen requests for information from your potential suppliers, each one summarising how they can meet your requirements, along with a visit from each sales team - all with a similar pitch - the site visit can highlight a supplier's real strengths and weaknesses.

In its quarterly publication, management consultancy McKinsey advises companies looking at outsourcing to India to consider the track record of the supplier in attracting the most talented IT staff to meet the demands of a growing number of customers.

"Talent [of the supplier] in some key categories will undoubtedly run short as more companies begin using offshore partners. Only those [suppliers] with strong training programmes are likely to keep up with the work," the report said.

Offshore advisory firm NeoIT recommends that the site visit should also achieve the following objectives: to improve your understanding of the present and future capabilities of the supplier; to enable you to understand the process; and to help you better understand the local culture and socio-political climate.

NeoIT also advises firms to carefully allocate their time during a site visit to a potential supplier. The priority should be to establish the history, experience and capabilities of the supplier, followed by viewing the supplier's operations and then touring the facilities.

Of course, every supplier meeting will be different, so these standard rules cannot be applied to every situation. But the objective of comparing potential suppliers remains and that will be easier if the same data is available for each supplier.

It is essential for the client to prepare in advance. The site visits will occur during a business visit, often with a full schedule, so questions can easily be forgotten if they are not planned and documented. If you have employed a consultant or advisory firm to help with the preparation of the site visit timetable, you should expect a briefing on the company to be provided.

A visit to a supplier's reference customer is another way to help you make your selection. Although the main purpose of the reference visit is to witness the kind of service the supplier has provided to a company similar to your own, the meeting can provide other useful insights. The people you will meet will have gone through the same supplier selection process as you and will probably be keen to share some of their knowledge.

Just learning about the process they have used and the mistakes they made can help you avoid some of the same pitfalls.

Mark Kobayashi-Hillary is author of Outsourcing to India: the Offshore Advantage (Springer-Verlag)

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