The Vendor company selection guide to outsourcing

Millions of dollars are spent on vendor company outsourcing. Most organizations are outsourcing activities that are either not cost efficient if done in-house or not core to their businesses. Vendor company selection is one of the most important steps in outsourcing and it is a strategic decision.

When you’re reviewing proposals from service providers, don’t be afraid to ask questions. Checking references and asking for client feedback is another important thing to keep in mind. Also, all your concerns regarding a vendor’s specific capabilities needs to be addressed in a proper manner.

The stability of a vendor company in unstable environments is very important. You want to be sure you’re dealing with a company that can continue to support you for years ahead. Some of the questions that need brain storming and research are-

Evaluate your own requirements 1st

Before even looking for a vendor, you need to go through a thorough analysis of your own requirement. Believe me, this business analysis data will be your main weapon to choose a vendor by outlining their services and tallying it up to your requirement.

Venture Capital supported Vendor Company- A big NO NO!

You can’t afford to do business with a company that can be shut any time, can you? This is a possible scenario with all Venture Capital invested companies. As they simply stop funding the company when they feel that there investment has no ROI.

Strong roots

A good direction, deep commitment and strong roots in the IT industry. That’s what you are looking for. Is your vendor company’s future goals determined by anonymous investor, or, has it been built from the ground level by a group of partners? It is sensible to go with the second option if you do not want your outsourced project be a mess!

Price slashing- A warning sign

Does your objections make the vendor slash prices? Willing to offer a bargain is a warning sign that a vendor can’t meet all your needs. If such is the case, then stay away from the company!

Visible Growth

The rate of growth can be found out by checking the financial. If growth is turbulent or inconsistent, it could be a point of worry. A consistent or at least sustained growth is good and you can be one step ahead in selecting the best vendor company for your business.

In some extreme cases it is possible that even after taking care of all these factors, some vendor companies might just surprise you at the last moment. Don’t worry, there is a solution for this too. Run a demo project and judge their capability of understanding your project requirements.

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Source: CodeWebber