Supplier selection is perhaps the most important part of any outsourcing strategy and requires a great deal of diligence in any business planning. Many companies still struggle with the implementation of outsourcing with offshore companies due to language barriers, cultural differences, or poor understanding of objectives. Today Engineering Services Outsourcing (ESO) is highly fragmented with many different services being outsourced. While some suppliers can offer outsourcing that cover an array of industry needs a company will need to anticipate management of multiple suppliers if they require to outsource a variety of services. A dedicated approach to integration of the outsourcing functions and a metric based process for assessment of performance is necessary to ensure success and long term improvement. While deciding to outsource, it is also important to analyse the market maturity available to support activities targeted to be outsourced. This will ensure all targeted activities are supported by mature available suppliers and the right kind of capability and knowledge is available.
The qualifications of suppliers need to be evaluated in detail and substantiated by demonstrated performance and industry expertise. For highly regulated industries there may also be requirements for outsource service providers to be registered to business or regulatory requirements, which may require verification or development of specific certifications. Supplier selection should focus on the capabilities required to execute the core elements to be outsourced as well as ability of the company to meet expectations and integrate quickly to the needs of the business. A thorough understanding of the suppliers’ cost structure and ramp plan to take on the new work is essential. The outsourcing supplier must have the correct qualifications, correct technologies available and ample resources on hand to accept the work in a timely fashion. Eventually, it is an efficient ESO partner with the requisite domain skills matched by innovative engineering processes and an expanded global delivery footprint who can steer the partnership in the right direction.
Some of the key characteristics organizations look for from their ESO partner include:
• Ability to drive deep customer relationships
• Ability to offer customizable, scalable, and flexible engagement models
• Ability to consistently offer workable solutions through a global delivery model
• Ability to offer services specialization across specific verticals
• Ability to consistently offer operational efficiencies through a process driven outsourcing approach
• Ability to drive SLA based engagements
• Self-sustaining process oriented culture
• Access to a large talent pool and ability to breed talent with specialized skills
• Capacity to invest in expanded CoE development capabilities
Longevity and relevance of a successful ESO partnership stands strong on the foundational pillar of collaboration.