Companies choose IT outsourcing for reasons such as focusing on core operations, cost savings, and technical expertise. Here are some guidelines to ensure that your IT outsourcing programs are effective.
Ensure that the vendor maintains confidentiality of business information: Evaluate the IT vendor's confidentiality policies. CIOs should legally bind IT vendors to not share any crucial company information with third parties. For instance, at Cleartrip, we make our IT outsourcing vendor sign a non-disclosure agreement. The vendor is required not to use information about Cleartrip, or the knowledge gained through its relationship with us, for projects similar to our line of business.
Additionally, the vendor is required to not leak any information about company-specific practices and policies. For example, Cleartrip has a process for instant cash back, whereby, once booking is completed, an instant cash back is made to the customer’s account. A clause in our SLA with the back office and customer care operations outsourcing vendor forbids it from sharing details about such processes.
Ensure that SLA promises are fulfilled: Evaluate whether the IT vendor is capable of fulfilling the terms of the SLA. At Cleartrip, for example, a refund process must be completed in four hours. The back office process outsourcing vendor must have its tools fine-tuned to deliver refunds on time. The vendor is subject to heavy penalties if it fails to complete the process on time. Any loss which Cleartrip incurs due to non-fulfillment of SLAs is recovered from the outsourcing vendor.
Ensure that an engagement model is established: With the in-house team and the IT outsourcing vendor working hand in hand, it is important to clearly define the role of each member in either team, and establish an effective engagement model. At each level in the engagement model, there are touch points between the in-house team and the vendor for smooth flow of IT operations.
Absence of such provisions can result in overlap in job roles and tasks, potentially leading to project failures. For example, the team lead of Cleartrip’s in-house team needs to be in touch with the vendor’s team lead for day-to-day activities.
Check out the financial health of the vendor: When evaluating an IT vendor, examine the financial stability and technological maturity of the vendor company. The working style of the vendor, such as being flexible and adapting to the customer’s preferred way of working, achieving targets, reputation in the market, and reference checks and testimonials should be considered before zeroing in on an IT outsourcing vendor.
About the author: PK X Thomas is the chief operating officer (COO) of Cleartrip and has over 16 years of experience. He specializes in infrastructure and knowledge management. Before joining Cleartrip, Thomas worked with Lionbridge as head of technology. Prior to that, he was founding CTO of Investment Research and Information Services (IRIS).
(As told to Anuradha Ramamirtham)