A few weeks ago, I listened as a client described a failed outsourcing project and the difficult situation they were in as a result. They had not defined their business needs and selection criteria carefully before determining which provider to negotiate with. Their selection was based upon personal relationships, past bad experiences, and some marketing hype. They ended up trying to strike a deal with a provider that not only could not meet their needs, but they didn't find that out until they were well into negotiations. They cancelled the transaction, which cost them hundreds of thousand of dollars in consulting and legal fees, and put themselves in a very precarious position operationally. I wish I could say that this situation is unusual, but unfortunately, I have seen it many times in my consulting career.
Determining selection criteria before deciding who you want to invite to the outsourcing negotiations table is not rocket science. In fact, it is such a seemingly mundane task, that most people just skip it.
Picking the Right Service Provider -- Art or Science?
Provider selection is perhaps the most important decision to be made in the course of a services outsourcing initiative, and also one of the most difficult. And there usually isn’t just one service provider that can deliver your services. There are usually several or perhaps dozens of highly qualified firms that can meet your needs, and your job is to identify the one with which you want to do business.
In these difficult economic times, clients are finding that there is tremendous competition for every sourcing opportunity they identify. With dozens of companies vying for your business on even the smallest transaction, how do you pick the right service provider from the crowd?
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