Having made the choice to outsource the IT functions, the following steps should be completed to make the correct decision:

1. Determine what services to outsource:
   • Identify critical success factors (i.e. cost, quality, time, etc.) and criteria.
   • Rank success factors by business importance.
2. Determine which IT outsourcing firms provide these services:
   • Assess the organization based on:
     • Financial stability (good track record, solid business model, sound financial results)
     • Management and technical staff (how qualified they are)
     • Contract flexibility (time and materials, fixed price, other agreements)
     • Location (local, national, global)
     • Customer perception (long-term relationships with customers)
   • Determine selection criteria based on:
     • Breadth of services (outsourcing, system integration, consulting)
     • Business expertise (knowledge and expertise on business functions, including, finance, HR, manufacturing, customer service)
     • Project management methodologies (tools used for analysis, implementation, quality assurance and reporting)
     • Customer relationship management (contracts designed to fit the customer)
     • Existing technology partners (established partnerships with key vendors)
   • Seek request for information (RFI) and evaluate based on criteria.
3. Further evaluate top 3-5 candidates.
   • How is performance measured?
   • Are contractual agreements flexible?
   • What compensation is made for failing to meet objectives?
   • Will they provide reliable references?
   • Will our business cultures agree?
   • What is the expertise level and credentials of the service staff?
   • Is the candidate realistic in what they promise to deliver?
   • Who owns the work product and intellectual property?
   • What documentation is to be provided and who owns it?