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Overall Company Approach:

Outsourcing involves much more than just signing a SLA. Understanding intangible factors, related to offshore vendor, is as important as knowing the tangible ones.Consideration of the following facets during vendor evaluation process would help in detailed offshore vendor evaluation:

  • Company Overview:

    Familiarizing with offshore company's vision and mission facilitates in reframing both teams' objectives to suit project needs. Their development and expansion strategy can be comprehended from the progress curve.

  • Quality Standards:

    Vendor's CMM (Capability Maturity Model) level and ISO certifications, a pointer towards software processes and quality standards in practice should be verified. Opting for a CMM Level 3 or Level 2 vendor may prove to be more viable where non-intricate projects are concerned.

  • Infrastructural Facilities:

    Vendor's infrastructural set up like server specifications, telecom bandwidth, secure network facilities for unhampered interaction, back up facilities, Internet connectivity, continuous power supply arrangements, et all. should be robust enough to ensure continuous progress of the project along the expected lines.

  • Maintenance measures:

    How frequently does the vendor carry out maintenance measures to ensure that existing facilities work at optimum rate? Vendor's up gradation and BPR (Business Process Re-engineering) policies indicate his keenness to adopt and be in pace with the latest technological developments.

  • Scalability:

    Depending on capability of vendor to scale up facilities, both infrastructure and personnel, the outsourcer can decide whether to go for a long-term contract with a particular vendor or limit it to the current project only.

  • Data Security Measures:

    Offshore vendor's steps to safeguard the outsourcer's sensitive, confidential information should be thoroughly looked into. This issue becomes more important while looking for vendors in countries where Data Protection (IP) law is not exhaustive enough to take care of such issues.

  • Financial Stability:

    Vendor's scale of business operations and its ability to expand is revealed from its financial figures. Its self-sufficiency for its business activities is also highlighted from its financial condition.

  • Pricing and payment policies:

    Pricing and payment form an important and major part of any offshore contract. Offshore vendors usually follow either a fixed price model or variable price (also called time & materials) model. With well-defined requirements and clearly expected deliverables, fixed price model is preferred. Time & Material model is ideal where specifications are not clearly defined, and cost is determined based on the resources spent.

    The payment policies and expected payment mode by vendor needs to be clarified at the outset of offshore relation.

  • Regional Safety:

    The offshore vendor's local safety is an equal contributor in ensuring project's day-to-day continuity. However, this factor is mostly overlooked during vendor evaluation.

  • Reputation:

    Ask for case studies to know more about the type of projects handled. Contact their past and existing clientele to get first hand review of their work. The rate of repeat customers is a sign of satisfactory service provided.

  • Contingency Measures:

    Knowing vendor's business continuity and contingency strategy would help outsourcer steer clear of huge monetary losses if a dispute results in sudden termination of the contract.

    Check whether the vendor has all the necessary insurance claims to take care of any unforeseen incident.

  • Exit Policy:

    What if the offshore vendor is unable to meet the project requirements or deadline? Analyze the effect it will have on your business and what you expect from the vendor in such situations. Will the vendor be ready to compensate and comply with your terms in such a case?

The above factors help in understanding the offshore company's business approach, an important ingredient in building a successful offshore relationship.

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