OnYourMark, LLC Blog

This month‘s Pro navigates through the often confusing world of your office technologies… should you take care of it yourself or seek outside help?

This guide will help you determine whether you should outsource your project to a third party before hidden costs of training and software purchase threaten to run the project into the ground. Some of the many reasons companies choose to outsource come when they are faced with the following conditions:

• Current staff time is already dedicated to work and cannot reallocated to handle the project in house.
• Current staff does not possess the required technical expertise to scope out and properly implement the project.
• The project is needed sooner than the available time to train current staff.
• The Total Cost of Ownership (TCO) for the project is lower when outsourcing.
• The project has a wide range of technological requirements that are available at a lower cost from specialized providers.

While these issues are not unique to technology projects, outsourcing technology projects raises yet another set of issues. Even when a technology project is outsourced, time is required for an in-house manager or team to manage a vendor relationship. Your company must identify an appropriate vendor or consultant to do the required work. Finding the right one often requires writing a Request For Proposal (RFP) so that vendors and consultants can submit bids. The RFP process itself can be time-consuming depending on the size of the project. The contract with the vendor or consultant should clearly specify the scope of services, related costs, how contract disputes should be addressed, and how the contract should end. Some contracts require a partial upfront payment, while others may have ongoing monthly or quarterly costs.

Before you begin your search for a specific vendor or solution, define your project’s ultimate goals. Why do you need the product? A clear and concise definition will help you direct the work of a consultant or vendor, or result in the discovery that you do not need to outsource the entire project, but only need to outsource some issues and handle other issues in-house. Questions you should consider include:

• What part of our current business system do we want to improve?
• What are the current processes of the system? (Flow charts may help to define these processes)
• Is the project needed to cover up a flaw in a previous project?
• Would any steps in the process benefit from being automated?

What part of our current business system do we want to improve? Look for areas in the system where there is a redundancy. While not all business principles will benefit from automation due to automation’s lack of manual review, redundancy can be a sign of misappropriated employee time. For example, your CFO’s check signing time could be automated with a secure signature printer, allowing him time to assess the value of your next project.

Is the project needed to cover up a flaw in a previous project? Carefully rouging a new tool on top of an already broken system may not have the intended results of improving operations. As many providers have a motive to sell you more technology, they may not be able to separate their own self-interest from your real needs. It is essential that you understand your needs before vendors and consultants are brought in. This is less of a concern if you are working with a consultant whose sole purpose is to help you determine your needs and they will not be part of implementing the solution.

Be clear about what would be different if the system changed. Detail exactly what will work better and the results from those improvements. A list of potential outcomes can be used to determine if the project was a success and by how much. The list of differences will also come in handy for determining any training requirements.

After you have determined the project goals and parts you can then determine what type of vendor or consultant best suits these needs. Unfortunately, a standard menu of services and products for technology vendors and consultants does not exist. Many vendors claim specialization in practically every area of technological expertise. While claims like this may be true for large consulting firms like IBM, HP, and Novell, smaller consulting firms may outsource parts of your project in order to make this claim true. Depending on the size and scope of the project you may only need someone with a specific technical expertise or a large firm to help define, design, implement, rollout and support the product.

If you only have a general idea of what you need, but lack the specific knowledge to translate it into a written RFP, you may want to hire an “intermediary” outside consultant who has expertise in the specific area, but is not bidding on the project to help with this tedious process. An intermediary can be extremely valuable for complex projects such database systems, wide-area networks, or large-scale websites.

Perhaps the most important issue for your company to address is the cost analysis of handling the project in-house versus an outsourced solution. Don’t forget to address the possibility of a mixed solution as well. Does your company have existing staff with appropriate skills to implement the project or parts of the project? If so, are they available to be re-assigned to the project? If you have available staff but their skill sets are not the right fit for the technology project, is retraining a possibility? For example, maintaining the current events portion of a website after it has been designed and produced is typically something that existing staff can be retrained to do.

However, installing and maintaining a custom server-based accounting system may be too complex. Is there opportunity to hire new personnel (either temporary or permanent) with the desired technological skills? Highly trained personnel typically require higher compensation and may only be needed for the duration of your project’s production.

Whatever the problem you are addressing, it’s important to clearly define what your company’s needs are before bringing in a third party. For all projects, technology related or not, outsourced or not, it is the best way to ensure your specific needs drive the technology that you use and produce.

What would you like to ask the pro? Email your questions to askthepro@OnYourMark.com!