Advice On Selecting Project & Outsourcing Service Providers

by Alex Roan on Jun 6, 2015

I remember on one project a Russian business expert was offended by an Indian consultant shaking his head in disagreement. The Russian person didn't know that in India a certain shaking of the head indicates 'I am listening'. In another project in Morocco a user requirement was almost missed because a local expert was ashamed to tell a foreigner that a donkey was a transportation type that needed to be programmed into the process and system.

Or there was that time on a multi-million dollar project where the system integrator was expected to manage the entire business change project, but they only thought they were responsible for the systems design and build. As an employee and as a consultant I've been involved in the buying and selling of operational outsourcing and project delivery services often. And every time I have seen some significant issues due to a lack of diligence in the buying process. If you are planning to buy consulting, systems integration or outsourcing services, you should go through a structured approach to ensure you cover all the bases. In addition pay particular attention to the following

Cultural differences

Both countries and organisations can have fairly strong cultures which drive particular habitual behaviours. These behaviours can be misunderstood causing various problems. For example

• In some countries it is considered polite to always say 'yes' to customers and managers. It may be difficult to get a true read on whether some things can be achieved when no one says 'no'
• Some businesses place a lot of emphasis on long hours, structure and hard work, some put more emphasis on being sociable, joining the afternoon coffee break, being home on time
• Even a simple thing like dress code can cause a social barrier on a project, consider a creative company buying tax advisory services and how the formally attired consultants will make the 'jeans and t-shirt' guys uncomfortable (apologies for the stereotypes!).

Consider these differences when you are buying services from another company. They will have an impact both in the selection and buying and in the actual project or operational services delivery.

Remember You Are Talking To Sales People

This may seem silly, but I have noticed that buyers of services tend to forget that they are dealing with sales people. I've seen senior stakeholders get enamoured with charming representatives, glossy brochures and fancy presentations. Always try and meet the people in the delivery departments who will be providing the services. Specifically

• Ask to meet the actual people you will be working with if you buy services from them
• If you're buying outsourcing services ask to visit the real location and see the live operations providing services to other clients
• Be wary of being offered sample CVs or sample people, they will probably show you their best people, who you likely won't get unless you are their top key client

Experience Trumps Everything

This may be a personal opinion, but regardless of how much you rate it, it is key. Service providers will tend to bid aggressively for work. Quite often it may be work they haven't exactly done before. So the key questions are

• Where have you done this before?
• How many times have you done this?
• What assets do you have from prior experience? (think tools, techniques, models etc. and I separate those developed from experience vs. from intellectual thinking only)
• How similar was the scope?
• Was it the same industry or one you can learn from?
• Do you still have the employees that did this before, and if so, will I have them on my project, and please show me their CV.

If they haven't done it before, but they are smart, and you are getting a great deal, plan for risks and issues and make sure you get the appropriate discount because they are getting a reference from you for a new sales offering.

Relevancy vs. Volume Of Documentation

During the bidding process some service providers will produce long glossy impressive sounding presentations talking about mature methods of x, y and z developed over years of working with similar clients etc. Don't be fooled by complexity and polish. What I recommend to look for is the service provider that can talk to your specific need in the most concise and relevant way possible without any boiler plate content whatsoever. Knowing through experience exactly how to run your project or what kind of issues your operations will face trumps any kind of fancy method, tool or model any day of the week. Be sure to test prospective service providers in this way.

Make Sure They Understand

The most significant delivery issues I have seen have come down to a fundamental lack of understanding of the work expected from the outset. I've seen a proposed spec for an accounting project which listed scope as e.g. accounts payable. I advised the client they needed a more granular level of detail, when the more detailed version was provided I saw that certain parts of accounts payable were in scope and certain were out of scope - bullet dodged! If you don't work in accounting consider that is almost like hiring an agency to make a commercial, and them planning to do a video, but no sound. A very common omission relates to project management, status reporting, communications, stakeholder relations management etc. A service provider may often assume they are hired to do very specific work and you will manage everything around it. Be clear on who is doing what to a granular level and do not assume inclusion of any service by omission.

Surprise Questions and Testing Experience and Smarts

When you are selecting a service provider, you will likely have some formal interviews or presentations. Plan some questions and case study scenarios to ask them about. Make some of them total surprises - cover topics or situations you haven't talked to them about before. This will test

• Do they really have experience or have they just been researching the area you want them to work on
• Can they think on their feet
• Make sure to cover technical knowledge and general business / project or operational management with a few questions. These are the things that stand out to me, what have you noticed that requires more attention when selecting or working with third parties?