Asia Pacific’s IT spending is expected to grow about 10-16% till 2010, beating developed markets, according to a study by consulting firm
Zinnov. India and China, in particular, represent large untapped markets in the region.
While India’s IT spending is likely to grow between 17.6-24% by 2010, China would grow 10-13%, according to the study. This is in comparison to the 3.3-6.5% increase expected in global IT spending. Expenditure on hardware, software and IT-BPO services comes under IT spending.
“With the shrinking IT budgets of the developed world set to shrink further, IT services companies have been working on realigning growth strategies and looking at opportunities in countries such as India and China,” said Zinnov advisory services engagement manager Chandramouli CS.
India’s IT spending currently totals $17 billion, while China’s IT spending stands at about $21 billion.
Zinnov says North America would see its IT spending grow about 5% and Europe, 4-5%. Spends in the US would move in the range 2.5-6%, reflecting a dip in the nearer future and then picking up towards 2010.
Mr Chandramouli says companies in emerging markets, which are in their growth phase, have a greater requirement for building IT infrastructure. A recent CIO survey in India showed that most domestic companies don’t have scalable IT systems.
The opportunity in India and China is also highlighted by the large presence of small and medium businesses (SMBs) in these emerging markets. According to IDC, about 23.4 million SMBs – nearly one-third of the global total – are located in Asia-Pacific, excluding Japan.
These also represent an untapped market with a large potential. For instance, the SMB share of IT spending in India is forecast to grow from 38% per cent currently to over 50% by 2015.
Wednesday, October 22, 2008
Saturday, October 11, 2008
Towards More Efficient Data Centers
The main three areas of focus of data center 3.0 are consolidation, virtualization and automation. The trend in data centers is to go from many data centers in an enterprise to fewer. The main drivers are power, cooling, space constraints, and the massive proliferation of underutilized machines. The focus of our consolidation is to bring greener data centers and improve capex and opex.
Also, Application delivery is something that CIOs need to concentrate on. Suppose I send you a file and you make some changes, and this goes back and forth a thousand times, and each file transfer takes 4 milliseconds, I can spend 40 minutes for the exchange of one PowerPoint presentation. Instead, if I consolidate on what is called the wide area application services (WAAS), my network looks into your content and instead of sending the entire file, and it sends only the changes back and forth. Now, in this case, I'm using my bandwidth more efficiently. We have built this into our networks.
One more area of importance is compression. Today, all sorts of traffic like file traffic, Web traffic, exchange traffic, and video traffic flows through the network. Compression can make the network respond faster and give huge savings. It will also allow remote users to “feel” local by giving them very good response time. Think of the benefits for areas like finance, where one millisecond can represent millions of rupees.
Also, Application delivery is something that CIOs need to concentrate on. Suppose I send you a file and you make some changes, and this goes back and forth a thousand times, and each file transfer takes 4 milliseconds, I can spend 40 minutes for the exchange of one PowerPoint presentation. Instead, if I consolidate on what is called the wide area application services (WAAS), my network looks into your content and instead of sending the entire file, and it sends only the changes back and forth. Now, in this case, I'm using my bandwidth more efficiently. We have built this into our networks.
One more area of importance is compression. Today, all sorts of traffic like file traffic, Web traffic, exchange traffic, and video traffic flows through the network. Compression can make the network respond faster and give huge savings. It will also allow remote users to “feel” local by giving them very good response time. Think of the benefits for areas like finance, where one millisecond can represent millions of rupees.
Remote Infrastructure Management
The Indian offshoring success story is a phenomenon that has changed the way business is done globally. And India has constantly innovated to push the outsourcing envelope. After having created Application Development and Maintenance (ADM) and Business Process Outsourcing (BPO), we now have another addition to the outsourcing saga: Remote Infrastructure Management Services (RIMS).
RIMS comprise of day to day management of IT infrastructure needs of an organization from a remote location (although services are available that combine remote with on-site). RIMS constitutes management of networks, security, servers, storage devices, applications, desktops and a 24x7 help desk. Increasingly, enterprises worldwide have been waking up to the challenges involved in ensuring the availability and the predictability of their networks and devices -- and have stumbled across this RIMS solution.
Traditionally this need has been fulfilled by in-house teams or outsourced to local as well as large traditional IT services players.
Driving the outsourcing of IT infra is the fact that, technology is changing rapidly and today even SMBs are deploying servers and network storage devices (their 180 GB desktop hard drives are not good enough!). As price of devices fall and technological changes become more rapid, it is labor which maintains the IT infra that has become the single largest contributory factor to costs.
You can see the developing picture: lowered device prices, higher technology quotient, wide usage of technology across industry, compliance requirements, growing shortage of qualified talent, increasing cost of IT infrastructure management, retention issues with IT talent...The answer? Offshore IT infrastructure management to markets where talent is easily available and where tools and processes have been developed to manage your infrastructure remotely.
The good news is that newer trends in technology, such as virtualization and cloud computing are creating win-win situations for the customers as well as for the vendors. These technologies are paving the way to consolidation and standardization of IT infrastructure for global players. The reduction in complexity makes it less risky for the clients to outsource to RIMS vendors.
On their part, vendors have enhanced their capabilities in managing diverse technologies by creating training, to rapidly improve the skill sets of their employees, and are placing a growing emphasis on rigorous quality processes. Additionally, as the industry is maturing, IT infrastructure management tools available in the market have simplified. These tools are integrated with governance features which address the management of multiple vendors.
Beyond the technology and delivery aspect, one significant change these technologies are bringing is that of mindset. CIOs are now more comfortable with the thought of having the IT operations hosted and delivered out of locations outside the enterprise premises and Global Delivery Models are strongly gaining acceptance in the IT infrastructure management domain.
The good news for RIMS adopters is that Indian vendors have been innovating not just on the service front, but on the pricing front as well. Today there are several pricing models to choose from ? device based, outcome based, input based and a combination of all.
Not surprisingly, the mid-sized deals segment of the market has become an important source of growth for RIMS providers.
RIMS is clearly a specialist play. The rigorous processes and operations combined with the critical nature of business makes it imperative for the vendors to specialize. A RIMS vendor focused in this area would be able to provide enhanced quality of service as a result of aligning tools, processes and skill sets to the industry needs.
And to us, the biggest trend is the choice that RIMS adopters are making ? by carefully choosing specialist players over others to manage their infrastructure.
RIMS comprise of day to day management of IT infrastructure needs of an organization from a remote location (although services are available that combine remote with on-site). RIMS constitutes management of networks, security, servers, storage devices, applications, desktops and a 24x7 help desk. Increasingly, enterprises worldwide have been waking up to the challenges involved in ensuring the availability and the predictability of their networks and devices -- and have stumbled across this RIMS solution.
Traditionally this need has been fulfilled by in-house teams or outsourced to local as well as large traditional IT services players.
Driving the outsourcing of IT infra is the fact that, technology is changing rapidly and today even SMBs are deploying servers and network storage devices (their 180 GB desktop hard drives are not good enough!). As price of devices fall and technological changes become more rapid, it is labor which maintains the IT infra that has become the single largest contributory factor to costs.
You can see the developing picture: lowered device prices, higher technology quotient, wide usage of technology across industry, compliance requirements, growing shortage of qualified talent, increasing cost of IT infrastructure management, retention issues with IT talent...The answer? Offshore IT infrastructure management to markets where talent is easily available and where tools and processes have been developed to manage your infrastructure remotely.
The good news is that newer trends in technology, such as virtualization and cloud computing are creating win-win situations for the customers as well as for the vendors. These technologies are paving the way to consolidation and standardization of IT infrastructure for global players. The reduction in complexity makes it less risky for the clients to outsource to RIMS vendors.
On their part, vendors have enhanced their capabilities in managing diverse technologies by creating training, to rapidly improve the skill sets of their employees, and are placing a growing emphasis on rigorous quality processes. Additionally, as the industry is maturing, IT infrastructure management tools available in the market have simplified. These tools are integrated with governance features which address the management of multiple vendors.
Beyond the technology and delivery aspect, one significant change these technologies are bringing is that of mindset. CIOs are now more comfortable with the thought of having the IT operations hosted and delivered out of locations outside the enterprise premises and Global Delivery Models are strongly gaining acceptance in the IT infrastructure management domain.
The good news for RIMS adopters is that Indian vendors have been innovating not just on the service front, but on the pricing front as well. Today there are several pricing models to choose from ? device based, outcome based, input based and a combination of all.
Not surprisingly, the mid-sized deals segment of the market has become an important source of growth for RIMS providers.
RIMS is clearly a specialist play. The rigorous processes and operations combined with the critical nature of business makes it imperative for the vendors to specialize. A RIMS vendor focused in this area would be able to provide enhanced quality of service as a result of aligning tools, processes and skill sets to the industry needs.
And to us, the biggest trend is the choice that RIMS adopters are making ? by carefully choosing specialist players over others to manage their infrastructure.
The Indian IT growth
With GDP growth of about 9 percent and wider expectations from analysts that in near future Indian economy can rule the globe, Indian business is on a roller coaster ride. Indian business, especially IT and ITeS segment is the backbone of this commendable GDP growth. Although IT sector was doing reasonably well, however it seems retrenchment has hit India also. The Indian counterparts have been constantly appraised, no wonder Indian IT industry has spearheaded towards consolidated global expansion.
Sky is the limit, when you know where you are heading to. Correlating these words with success of Indian IT, these are the key acquisitions made by Indian IT.
1. Infosys, the leading IT giant of India, recently announced its plans to acquire UK based consultancy, Axon Group plc. The deal will be cash based and company will purchase SAP consultant Axon for USD753 million. The deal will be a landmark in Infy’s history as will give a ready made access to existing market of Axon in Europe. Also, Infosys can leverage Axon’s strength and consultation expertise to win big transformation deals in US and Europe, where Axon has a strong foothold. Last year, the Indian software giant announced its plans to acquire Philips Global’s finance and accounts BPO for assured revenue of USD200 million.
2. The second big acquisition is made by outsourcing giant, Wipro Technologies. The outbound deal by Wipro purchasing US based InfoCrossing for price USD 600 million. It is a mega deal. Such acquisitions are key propellers for Indian IT firms as they help companies to enhance their foothold in domestic market along with the added advantage of resourcing. The biggest advantage of this acquisition is the direct entry to US markets where Infocrossing has strong foothold. Also, the company can leverage its hosted and managed services to provide IT outsourcing solutions.
3. The another key acquisition was made in BPO segment. In July, this year WNS Holdings Ltd. announced its plans to acquire BPO business of UK based insurance major, Aviva. WNS acquired Avivas BPO business Aviva Global Services for USD 228 million. Under the purchase agreement, company took over all shares of AGS and took complete control over operations in Bangalore, Colombo, Pune and Chennai. Beside these captive operations, the WNS will offer BPO services to Avivas UK and Canadian operations.
These were the acquisitions that transformed the Indian IT scenario and made Indian companies to unfurl their flag of expansion on foreign lands. Such acquisitions offer not only a strong presence in domestic markets but also provide them chance to be renowned as global brand.
Sky is the limit, when you know where you are heading to. Correlating these words with success of Indian IT, these are the key acquisitions made by Indian IT.
1. Infosys, the leading IT giant of India, recently announced its plans to acquire UK based consultancy, Axon Group plc. The deal will be cash based and company will purchase SAP consultant Axon for USD753 million. The deal will be a landmark in Infy’s history as will give a ready made access to existing market of Axon in Europe. Also, Infosys can leverage Axon’s strength and consultation expertise to win big transformation deals in US and Europe, where Axon has a strong foothold. Last year, the Indian software giant announced its plans to acquire Philips Global’s finance and accounts BPO for assured revenue of USD200 million.
2. The second big acquisition is made by outsourcing giant, Wipro Technologies. The outbound deal by Wipro purchasing US based InfoCrossing for price USD 600 million. It is a mega deal. Such acquisitions are key propellers for Indian IT firms as they help companies to enhance their foothold in domestic market along with the added advantage of resourcing. The biggest advantage of this acquisition is the direct entry to US markets where Infocrossing has strong foothold. Also, the company can leverage its hosted and managed services to provide IT outsourcing solutions.
3. The another key acquisition was made in BPO segment. In July, this year WNS Holdings Ltd. announced its plans to acquire BPO business of UK based insurance major, Aviva. WNS acquired Avivas BPO business Aviva Global Services for USD 228 million. Under the purchase agreement, company took over all shares of AGS and took complete control over operations in Bangalore, Colombo, Pune and Chennai. Beside these captive operations, the WNS will offer BPO services to Avivas UK and Canadian operations.
These were the acquisitions that transformed the Indian IT scenario and made Indian companies to unfurl their flag of expansion on foreign lands. Such acquisitions offer not only a strong presence in domestic markets but also provide them chance to be renowned as global brand.
Friday, October 3, 2008
Market Turmoil Could Mean Boost for India's IT Industry
Source-PC World, sep,16,2008
India's IT and outsourcing industry could see a mid-term boost from the current turmoil in the financial markets, the president of India's National Association of Software and Services Companies (NASSCOM) said Tuesday.
"I think there will be a short-term blip," said Som Mittal, speaking at a Tokyo news conference. "I think there will be more control processes that will be put in, which will all be IT and system-driven, so I think there will be more changes that would happen and for that I think there is more work."
"I'm not looking at this change as an opportunity, none of us should. But I'm sure it will lead to one because there would be systems and checks and balances and technology should be brought in to do this," he said.
Investment bank Lehman Brothers collapsed over the weekend after investors lost confidence in the 150-year old bank and it failed to find a buyer. At about the same time Bank of America reached a deal to acquire Merrill Lynch and insurer American International Group searched for and found a US$20 billion [b] financial lifeline.
The knock-on effects to India's IT industry from the failure of any one company or even a lull in business in a sector will also be offset thanks to the diversification that has happened in recent years, said Mittal.
"We are doing work in healthcare, utilities, transport, airlines. They may also have some impact but they are growing. From a business perspective our diversity will help," he said.
Within the banking sector in particular the work done by Indian IT companies is an integral part of their operations so this should also help insulate them further, he said.
"The work [the bankrupt companies] were doing still has to be done," he said. "Someone still has to run banking, and I think we're and integral part of that supply chain. The amount of supply chain processing that is done for these banks will still have to be done and will increase."
Mittal, who previously headed Hewlett-Packard's Asian operations, is in Japan to meet with local business leaders and political figures as part of an attempt to grow the market for Indian outsourcing in Japan
India's IT and outsourcing industry could see a mid-term boost from the current turmoil in the financial markets, the president of India's National Association of Software and Services Companies (NASSCOM) said Tuesday.
"I think there will be a short-term blip," said Som Mittal, speaking at a Tokyo news conference. "I think there will be more control processes that will be put in, which will all be IT and system-driven, so I think there will be more changes that would happen and for that I think there is more work."
"I'm not looking at this change as an opportunity, none of us should. But I'm sure it will lead to one because there would be systems and checks and balances and technology should be brought in to do this," he said.
Investment bank Lehman Brothers collapsed over the weekend after investors lost confidence in the 150-year old bank and it failed to find a buyer. At about the same time Bank of America reached a deal to acquire Merrill Lynch and insurer American International Group searched for and found a US$20 billion [b] financial lifeline.
The knock-on effects to India's IT industry from the failure of any one company or even a lull in business in a sector will also be offset thanks to the diversification that has happened in recent years, said Mittal.
"We are doing work in healthcare, utilities, transport, airlines. They may also have some impact but they are growing. From a business perspective our diversity will help," he said.
Within the banking sector in particular the work done by Indian IT companies is an integral part of their operations so this should also help insulate them further, he said.
"The work [the bankrupt companies] were doing still has to be done," he said. "Someone still has to run banking, and I think we're and integral part of that supply chain. The amount of supply chain processing that is done for these banks will still have to be done and will increase."
Mittal, who previously headed Hewlett-Packard's Asian operations, is in Japan to meet with local business leaders and political figures as part of an attempt to grow the market for Indian outsourcing in Japan
Thursday, October 2, 2008
India’s Managed Service Market Growing 25% Annually
Business Standard, sep, 02,2008
The India Managed IT Services market is expected to grow at a compoud annual growth rate (CAGR) of 24.9 per cent to become a $2.78 billion (Rs 12,232 crore) industry by 2010, says IDC making it one of the fastest growing markets in the Asia/Pacific region.
The total India Managed IT Services market in 2007 was estimated to be $1,170 million (around Rs 5,148 crore) with managed network services accounting for the biggest share of the pie followed by Managed Desktop Services. This represented 20 per cent of the total India domestic IT Services market, which crossed $5 billion revenues in 2007.
The report notes that the notion of managed services is no more just hype or an industry buzzword. Initially, the market witnessed large user enterprises adopting infrastructure management services (IMS) as they looked for competent partners to manage their increasingly complex IT infrastructure.
Praveen Sengar, Senior Manager, Software and Services Research, IDC India, said: "While engaging in outsourcing contracts, management should have a clear vision on long-term organizational goals along with activities that can be outsourced. A sound process to select the right vendor must be employed, evaluating prospective partners on multiple parameters and not just cost alone."
Moving forward, the fastest areas of growth will be Security, Storage and Data Center Services. IDC predicts Security and Storage Services to grow at CAGR of 31 per cent and 28 per cent respectively, over the next three years (2008-2010). Today the market for these services is still nascent. However, their adoption rates are expected to pick up at a fast pace as these services become inevitable for the ‘extended business enterprises’.
The India Managed IT Services market is expected to grow at a compoud annual growth rate (CAGR) of 24.9 per cent to become a $2.78 billion (Rs 12,232 crore) industry by 2010, says IDC making it one of the fastest growing markets in the Asia/Pacific region.
The total India Managed IT Services market in 2007 was estimated to be $1,170 million (around Rs 5,148 crore) with managed network services accounting for the biggest share of the pie followed by Managed Desktop Services. This represented 20 per cent of the total India domestic IT Services market, which crossed $5 billion revenues in 2007.
The report notes that the notion of managed services is no more just hype or an industry buzzword. Initially, the market witnessed large user enterprises adopting infrastructure management services (IMS) as they looked for competent partners to manage their increasingly complex IT infrastructure.
Praveen Sengar, Senior Manager, Software and Services Research, IDC India, said: "While engaging in outsourcing contracts, management should have a clear vision on long-term organizational goals along with activities that can be outsourced. A sound process to select the right vendor must be employed, evaluating prospective partners on multiple parameters and not just cost alone."
Moving forward, the fastest areas of growth will be Security, Storage and Data Center Services. IDC predicts Security and Storage Services to grow at CAGR of 31 per cent and 28 per cent respectively, over the next three years (2008-2010). Today the market for these services is still nascent. However, their adoption rates are expected to pick up at a fast pace as these services become inevitable for the ‘extended business enterprises’.
HP to Increase Presence in the Next-Generation Data Center Market
HP has recently announced the growth of its next-generation data centers customer base with the signing of contracts with over 60 customers to provide them with data center design services. Organizations across 12 industries in 27 countries which include companies such as Credit Suisse, UBS, Digital Realty Trust and Power Loft have signed up with HP’s subsidiary, EYP Mission Critical Facilities (EYP MCF), for its data infrastructure services.
EYP MCF provides strategic planning, design and operations support to help companies transform their data centers, optimize energy efficiency and enable business growth. Over 500 companies have worked with the company to design their data centers, command and control centers, trading floors, and supercomputing sites. Owing to increase in the demand for mission-critical services projects, HP plans to broaden its EYP MCF services availability to more countries.
“Companies from all over the world are turning to us to design and build the next-generation data centers required for high-density scalable computing,” said Peter Gross, Chief Executive Officer, EYP Mission Critical Facilities. “By offering customers the right solutions to complex energy-efficiency and optimization challenges, we are giving them the keys to adapt and transform to meet changing business needs,” added Gross.
HP’s recent EYP MCF agreements include the one with Power Loft to design a data center for the company which specializes in the development and ownership of high-density, high-security data centers. EYP MCF also designed and provided engineering consulting services on the company’s first data center, located in Virginia, U.S.A. Both the facilities will be LEED (Leadership in Environmental Design) certified and, upon completion, will operate using 52 percent less power than comparably sized data centers.
The company’s other EYP MCF projects include, designing a leading technology company’s energy-efficient technology infrastructure at its U.S. headquarters, providing mission-critical consulting services for a Tier IV data center master plan across a top U.S. university’s statewide, multi-campus data center environment, designing a high-profile, energy-efficient data center in Iceland, offering reliability levels from Tier I to IV and LEED Platinum certification and providing consultation services to global financial services firm UBS on its data center design
EYP MCF provides strategic planning, design and operations support to help companies transform their data centers, optimize energy efficiency and enable business growth. Over 500 companies have worked with the company to design their data centers, command and control centers, trading floors, and supercomputing sites. Owing to increase in the demand for mission-critical services projects, HP plans to broaden its EYP MCF services availability to more countries.
“Companies from all over the world are turning to us to design and build the next-generation data centers required for high-density scalable computing,” said Peter Gross, Chief Executive Officer, EYP Mission Critical Facilities. “By offering customers the right solutions to complex energy-efficiency and optimization challenges, we are giving them the keys to adapt and transform to meet changing business needs,” added Gross.
HP’s recent EYP MCF agreements include the one with Power Loft to design a data center for the company which specializes in the development and ownership of high-density, high-security data centers. EYP MCF also designed and provided engineering consulting services on the company’s first data center, located in Virginia, U.S.A. Both the facilities will be LEED (Leadership in Environmental Design) certified and, upon completion, will operate using 52 percent less power than comparably sized data centers.
The company’s other EYP MCF projects include, designing a leading technology company’s energy-efficient technology infrastructure at its U.S. headquarters, providing mission-critical consulting services for a Tier IV data center master plan across a top U.S. university’s statewide, multi-campus data center environment, designing a high-profile, energy-efficient data center in Iceland, offering reliability levels from Tier I to IV and LEED Platinum certification and providing consultation services to global financial services firm UBS on its data center design
India's IT services market to grow to $8.1 billion by 2011
BANGALORE, 29 AUGUST 2008
The IT services market in India is estimated to grow from US$4.1 billion in 2007 to $8.1 billion in 2011, representing a compounded annual growth rate (CAGR) of 18.6 per cent from 2006 to 2011, according to the latest research by Springboard Research, a leading innovator in the IT Market Research industry. As per Springboard's report, titled 'India IT Services Market and Forecast 2006-2011', IT Services growth rate in India is well above the 10.5 per cent CAGR of overall Asia Pacific market and it makes India the fastest growing IT Services market in the Asia Pacific (excluding Japan) region.
According to the report, the Indian IT Services market is heavily dominated by infrastructure Services, which are estimated to garner 54 per cent of the market in 2007. Springboard further forecasts the segment to grow in line with the overall market and reach $4.27 billion by 2011. However, Applications Services with a CAGR of 19.6 per cent remain the fastest growing market segment, while IT Consulting -- typically used by vendors as entry point to reach clients in India -- is estimated to grow from $0.22 billion in 2007 to $0.40 billion by 2011.
"India is the epicenter of growth in Asia Pacific IT Services marketplace," said Sanchit Vir Gogia, Senior Research Analyst for Services at Springboard Research. "Not only is the India IT Services market forecast to be the fastest growing in the region, the country also has a rather unique position in the worldwide outsourcing arena through a well-educated and language-proficient workforce, that sets it apart from other Asian competitors," Gogia added.
The IT services market in India is estimated to grow from US$4.1 billion in 2007 to $8.1 billion in 2011, representing a compounded annual growth rate (CAGR) of 18.6 per cent from 2006 to 2011, according to the latest research by Springboard Research, a leading innovator in the IT Market Research industry. As per Springboard's report, titled 'India IT Services Market and Forecast 2006-2011', IT Services growth rate in India is well above the 10.5 per cent CAGR of overall Asia Pacific market and it makes India the fastest growing IT Services market in the Asia Pacific (excluding Japan) region.
According to the report, the Indian IT Services market is heavily dominated by infrastructure Services, which are estimated to garner 54 per cent of the market in 2007. Springboard further forecasts the segment to grow in line with the overall market and reach $4.27 billion by 2011. However, Applications Services with a CAGR of 19.6 per cent remain the fastest growing market segment, while IT Consulting -- typically used by vendors as entry point to reach clients in India -- is estimated to grow from $0.22 billion in 2007 to $0.40 billion by 2011.
"India is the epicenter of growth in Asia Pacific IT Services marketplace," said Sanchit Vir Gogia, Senior Research Analyst for Services at Springboard Research. "Not only is the India IT Services market forecast to be the fastest growing in the region, the country also has a rather unique position in the worldwide outsourcing arena through a well-educated and language-proficient workforce, that sets it apart from other Asian competitors," Gogia added.
Wednesday, October 1, 2008
10 Biggest Concerns of a Customer While Outsourcing
1. How reliable is the vendor?
Ask the vendor for details such as number of years in business, number of employees, financial background and so on. Get a thorough picture of the vendor's history.
2. Does the Vendor provide quality products/services?
Vendors need to provide solid customer references as well as emphasize the processes that are followed within their organization to ensure quality products and services. Certifications such as ISO 9000 and CMM from independent agencies go a long way in providing customers with this assurance.
3. What is the Life Cycle cost of the Products/Services provided?
Cost is obviously a key reason to outsource. But while choosing a service provider, make sure you look at hidden costs from maintenance, connectivity/infrastructure, training, transition etc. instead of just the obvious costs such as licensing and consulting costs.
4. Will the vendor be able to meet delivery deadlines?
Make sure vendors promise realistic commitments taking care not to overstretch resources to a point where quality might suffer.
5. How safe is my data?
While addressing these data privacy related concerns, make sure your vendor meets your requirements in critical areas related to infrastructure security (Firewalls, Access Controls, Data Encryption, etc) as well as those that are human resource related (Pre-Recruitment checks, Non-Disclosure agreements, etc.)
6. What kind of risk am I taking on with this vendor?
Ensure that vendors provide evidence of Business Continuity/Disaster Recovery plans and risk mitigation plans. These arrangements go a long way in minimizing business risk.
7. What are the effects of the vendor’s employee attrition on me?
Ensure that vendors have cross-trained employees and have maintained sufficient buffer capacity to take care of such events.
8. Will the vendor be fair and transparent in his financial dealings with my organization?
Vendors need to be fair in matters related to invoicing especially in Time and Material type of contracts. Again, check with previous client references to ensure that the vendor is fair and transparent in his financial dealings.
9. Does the vendor comply with statutory laws and regulations?
If your vendor is not compliant with statutory laws, you stand a chance of being held responsible for violations of laws or regulations carried out by vendors. Increasing public scrutiny has ensured that customers are morally, if not legally, responsible for their vendor’s actions with respect to environmental damage, working conditions, etc. Therefore, make sure that none of the vendor's actions violate established laws.
10. Does this vendor’s culture match that of our organization?
A certain degree of ‘fit’ must exist between the two organizations in terms of work ethics and culture for smooth interaction. The best indication of this is your vendor's initial communication with you.
Ask the vendor for details such as number of years in business, number of employees, financial background and so on. Get a thorough picture of the vendor's history.
2. Does the Vendor provide quality products/services?
Vendors need to provide solid customer references as well as emphasize the processes that are followed within their organization to ensure quality products and services. Certifications such as ISO 9000 and CMM from independent agencies go a long way in providing customers with this assurance.
3. What is the Life Cycle cost of the Products/Services provided?
Cost is obviously a key reason to outsource. But while choosing a service provider, make sure you look at hidden costs from maintenance, connectivity/infrastructure, training, transition etc. instead of just the obvious costs such as licensing and consulting costs.
4. Will the vendor be able to meet delivery deadlines?
Make sure vendors promise realistic commitments taking care not to overstretch resources to a point where quality might suffer.
5. How safe is my data?
While addressing these data privacy related concerns, make sure your vendor meets your requirements in critical areas related to infrastructure security (Firewalls, Access Controls, Data Encryption, etc) as well as those that are human resource related (Pre-Recruitment checks, Non-Disclosure agreements, etc.)
6. What kind of risk am I taking on with this vendor?
Ensure that vendors provide evidence of Business Continuity/Disaster Recovery plans and risk mitigation plans. These arrangements go a long way in minimizing business risk.
7. What are the effects of the vendor’s employee attrition on me?
Ensure that vendors have cross-trained employees and have maintained sufficient buffer capacity to take care of such events.
8. Will the vendor be fair and transparent in his financial dealings with my organization?
Vendors need to be fair in matters related to invoicing especially in Time and Material type of contracts. Again, check with previous client references to ensure that the vendor is fair and transparent in his financial dealings.
9. Does the vendor comply with statutory laws and regulations?
If your vendor is not compliant with statutory laws, you stand a chance of being held responsible for violations of laws or regulations carried out by vendors. Increasing public scrutiny has ensured that customers are morally, if not legally, responsible for their vendor’s actions with respect to environmental damage, working conditions, etc. Therefore, make sure that none of the vendor's actions violate established laws.
10. Does this vendor’s culture match that of our organization?
A certain degree of ‘fit’ must exist between the two organizations in terms of work ethics and culture for smooth interaction. The best indication of this is your vendor's initial communication with you.
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