The problem is that in a company where outsourcing is being considered, there are multiple forces at work -- people making decisions based on internal, unspoken criteria or old prejudices, or perhaps making recommendations that will scuttle the deal for personal reasons. So taking the time to identify your goals and business needs, and the objective criteria by which your team will make a decision, can help take the decision out of the realm of the emotional and into the realm of practical, business decisions.
One way to approach this is to develop your selection criteria as a team, and then jointly rank and weight these so that you can assign value to each of the criteria you will use to evaluate the providers. For example, you may have both price and technical solution as part of your evaluation criteria, but which one is more important? Are you willing to pay more for a better technical solution or capabilities? Or is cost the most important criteria? You may have difficulty making these decisions, but it is far better to make these decisions up front before you embark on service provider identification.
Your business and sourcing strategy drives the selection criteria, which will drive the identification and selection of the provider. If you choose your list of providers before you have completed these strategy steps and have internal agreement, you will most likely find, in retrospect, that you have omitted some very good candidates, and included a few that clearly don’t match up.
Once you have your selection criteria identified, ranked and rated, you may want to identify any criteria that are minimum requirements or showstoppers. If there are criteria that the provider must meet in order to bid on your deal, you can save yourself time by making these criteria the first pass at selection. For example, if your company can only do business with companies that are based in a particular geography or that are of a certain size, then these criteria become an automatic disqualifier if they are not met.
You should investigate each of the companies on the potential provider list to ensure they meet your basic criteria before you engage with them. This is an activity you can have your internal team perform, or you can procure the services of an external advisor to help you with this activity. You don’t need to take a service provider through a proposal process to find out that it doesn’t meet the basic qualifications for selection.
Conduct Internal Survey
While you are working on this initial task, it is important to take another kind of internal survey: are there any providers on the list that your company, for whatever reason, cannot or will not do business with? This is sometimes a bit of a challenge, but the usual place to start here is with the executive committee. There may be some strong opinions on that team about who they want to do business with, but the real question to ask is -- if this provider gives us the best proposal is there anything that would prevent us from signing a deal with them? If you uncover anything significant and cannot get it resolved, it is best to omit this provider from your list. Neither you nor the provider have time to work on something that is futile.