Results tagged “outsourced service provider” from Inside DC Global

The Dilemma of an Outsourced Service Provider

 

Outsourced service providers have mushroomed all throughout the world to serve client companies mostly from the UK and the US who are likely to prefer outsourcing to Philippines for many and varied reasons. Outsourcing Philippines however is not spared from several issues confronting it.

 

Outsourced service providers are also known as managed service providers who tackles services fro another company. Tasks and services rendered here include IT services, remote data backups, desktop and security monitoring, and technical assistance and are provided via the internet. Outsource service providers also manage client company's web hosting and maintenance of their websites.

 

 Most companies choose an outsource service provider that can best cater to the needs of the company. Client companies have the option to select manage services provider. And as a business itself, these service providers need to answer several issues and considerations. This is to ensure that as an outsourced service provider, they are able to thrive sufficiently and keep themselves secure of a good and bright future.

 

Below are the issues and considerations outsourced service provider must take into account:

 

Issue:

Outsource agreements that are flexible to change its technology platform over time.

 
Consideration:

Ensure that you're able to change your technology as your business grows. Otherwise, a customer could require one set of technology even as you provide separate technology for other customers. This doesn't mean that you have to disappoint customers' requirements for service levels and technology refresh over time. But it should allow you to meet these requirements in flexible fashion.

 

Issue:

Freedom to use services offshore or use subcontractors as a cost-savings approach.

 Consideration:

To reduce costs, your outsourcing contract should provide that you may relocate services and work with subcontractors of your choosing. The customer will require you to negotiate appropriate confidentiality provisions and may attempt to assert other limitations on these rights. The key to securing this right is to guarantee clients seamless, high-quality service.

Issue:

Other measures service provider needs to have to keep costs under control.

 Consideration:

If a "cost-plus" deal isn't an option, alternatives include per-service fee increases. In this event, the contract should also let you process change requests through an orderly change-control procedure. If there are increased costs, you should have the right to come to agreement with the customer on additional charges. Also consider attempting to get the customer to agree to shoulder some of the burden of unanticipated cost spikes caused by the customer not following agreed-upon procedures.

To the extent that the customer's delays require you to sideline valuable resources, you should consider putting appropriate cost-containment provisions in the agreement. For example, if a customer delay forces your personnel to work overtime, the customer should pay for any increased wages. In addition, the contract can allow for cost-of-living increases if appropriate.

Issue:
Ownership/ proprietorship of the work service provider did or has developed on customer engagement.

Consideration:
Your outsourcing contract should clarify which party owns work performed rather than leave this matter open to question or later negotiation. Vagueness could lead to conflict later on. You and the client should clearly define ownership of the contracted work, whether it's software, business processes or other intellectual property developed over the course of the contract.

Issue:
Service provider's protection against piracy of its best employees.

 
Consideration:
Good talent is always in demand. Your outsourcing contract should reduce the likelihood that the customer will try to recruit your employees by having an appropriate nonsolicitation and nonhire clause.

Issue:
Modular outsourcing contract to be provided by the outsource service provider to its customers.

Consideration:
A master document that references concepts or attachments is suited to the ever-changing reality of an outsourcing. For example, the term of your contract should be a stated number of years or a month after any transition period is completed rather than a specific begin and end date. If your transition effort runs late, the length of time for service delivery is effectively pushed back so that a provider won't find his term shrinking. Contrast this with a more limited, specific date-driven contract that isn't flexible enough to recognize the manner in which project plans may change.

Most business groups turn to outsourcing for financial and economic reasons. Of course, we all know that outsourcing is a cost-cutting technique; but that's not all about it. Service providers promise to create improvement and facilitate innovation which later results in better services. In that sense, outsourcing helps improve service performance of the company. 

Outsourcing is a trend nowadays. This demand for outsourcing has triggered the influx of outsourced service providers, each with a promise to keep your company in the lead against its competitors. It is your task then to select the service provider that will help you achieve your business goals, that will work with you in accomplishing your tasks and help you stay upbeat in the market.

Define your needs. Outsourcing involves money. Costs vary depending on the kind of service you need: whether you are looking after disaster recovery or business continuity.  Have a self-analysis to help you determine the type of service you require, that way you pay for what you actually need and get the right help.

Consider locations. Don't disregard the location and proximity of the service provider's data center. It should be easily accessible by you and your IT staff. That way, it is not hard for you to visit the data center. It is also important that the data center has a good physical security, redundant power, separate power grids and communication links.

Count on experiences.  Service providers must be positioned to support every type of emergency. Feel free to ask questions like how many disasters they have handled, the type of recoveries they have done, and the average size of company that they have recovered.

A contract with any service provider should at least three years. A CIO Midmarket report said that "one year is too short a contract because of the amount of time and effort involved in bringing in a new vendor, and five years is too long because customers don't get to leverage falling technology costs". How long the duration of the contract is, you're ascertained that there is sufficient testing and flexibility of the contract you are bound to get into.

In any case, you should outsource to a service provider that can meet your recovery needs if problems on the outsource provider itself arises. Choose a service provider that can give you total solution to your business needs.