Many businesses have come to a point where they realized that deciding to outsource and colocate or host their IT infrastructure and services would be not only a benefit but simply a must to gain or retain business agility and to focus on their core business. Whether outsourcing all or part of your IT is right for your business is outside of the scope of this article.
If you have decided that your business needs to outsource a part or all of the IT infrastructure and services you will face a very tough choice considering that selecting the right IaaS, PaaS, SaaS or datacenter colocation provider is a high value decision carrying a great economical impact on your business. If your provider choice turns out to be a mismatch you could suffer financial consequences on many levels from the costs of additional charges for specific services or the costs of a provider change to even possibly a reputation hit and higher customer churn rates if things go really wrong.
Following the process of decision making analysis we take into account three basic elements that lead to formulating a good decision so take advantage of them:
- Information: gather your information and select only the one that is valid and from reliable sources – if it’s possible visit the facilities, read business cases and referrals, contact the companies and see how is the communication with their representatives and how reluctant are they to answer all your questions, do they assist you in providing the right solution and are their answers timely and relevant?
- Value: define the values that are relevant for your business and that you care about, look into what are your key business activities and what is your core business and how both can be supported by the providers, do their solutions solve all your pains and provide additional maybe unforeseen by you gains?
- Alternatives: create alternatives and compare your choices, if you can’t find suitable alternatives revise your previous points and analyze again, maybe you have missed something.
To ensure the quality of your decision and thus the stability, agility and future of your business you need to make sure you have correctly assessed your business needs and your determined expectations that your provider must meet. Six Sigma methodology hits this nail right on the head with the Voice Of Customer (VOC) approach, which is also employed by ITIL but for a different reason than Six Sigma. Whether you are familiar with Six Sigma or ITIL is irrelevant at this point, we simply want to leverage some of their techniques to assist our decision making process of the right provider:
- Make sure that you can define the must-haves or the minimal requirements that your provider simply must fulfill to even be considered, or in other words list for all your “business pains” they need to solve. Also know what part of your IT you are outsourcing and when.
- Have a good look at the efficiency of each provider with which they solve your pains, this will be directly tied to your providers costs vs. service and performance comparison.
- Let them get involved and help you, after all you will be helping them to grow their business if you become their customer, so don’t be shy and let them come up with ideas of how they can provide your business with additional gains. The best providers employing their expertise and rich service and feature portfolio will be able to advise you on additional advantages for your business even if you haven’t thought of them yet.
While gathering all the information on the providers that you take into consideration you should look at the following points to narrow down the alternatives suiting your business requirements and needs:
- Location: the location of the infrastructure and facilities can be of great importance because of several reasons. The location of your data will be a subject to local laws which is not always in your best interests. What should also be your concern is the economic and political stability of the country and it’s region. What you should never overlook is an answer to a question what are the chances of natural disasters and does the provider offer geo-redundancy to offset this kind of threat? What can sometimes be tied to the location are the language barriers and cultural differences, make certain that your businesses can communicate without hinders and that your business values and professional behavior are on the same level.
- Reputation and credibility: look into the providers reputation and credibility. Have you been able to find any negativity regarding their company or preferably recommendations of their services. Who has expressed their gratitude and who discontent, how reliable are these sources. Contact the sources and interview them to see what can you find out about their experience with said providers. Evaluate the financial fitness of the providers business. Are they a well established company, a startup or maybe a part of a bigger corporation. Who are their partners and what can they say about them?
- Expertise: do the providers of choice poses sufficient technical expertise and understanding of your business needs? Their proficiency must not be limited to technical knowledge as without clear understanding of the business aspects of your company they cannot provide you with the right solutions for your pains nor offer additional gains that would make them the right choice. Does the provider posses technical staff for engineering and support as well as account management to handle your daily operations? After initial contact and meetings are you convinced that their communication and procedures match your business mentality and expectations? Would you hire their staff to represent and support your business?
- Limitations: be aware of your providers limitations in all possible aspects that are relevant to your business operations. Does your provider have specific limit in business hours operations or are they available for you 24/7 without additional costs. Do you have any limitations for example regarding access to your data or infrastructure for a 3rd party and can your provider work with this and still fulfill your SLA? What are the response and delivery times along with capacity for additional infrastructure resources, specific projects and disaster recovery and do they suit your business goals? What are the penalties that you can agree upon if the provider does not fulfill the SLA or don’t make an established deadline? Get all the answers and compare them across the board.
- Agility and flexibility: your providers agility and flexibility will have direct impact on your business. Are you an established business or a startup are you experiencing steady growth? Or perhaps a shrinkage in difficult times. Maybe you are preparing to go mainstream or viral as a startup and expect a booming growth? Do you have an existing infrastructure that you are willing to relocate or supplement, are you starting fresh or are you starting a new division, project or business unit with a new provider as multi-provider hybrid solution while some of your infrastructure stays with other providers or even on-premise. These are vital questions that you need to get answered and your provider must fit within these business planning forecasts. If required they must be able to work with multiple vendors and integrators or connect to your other off- and on-premise infrastructure. If you have such requirements get written confirmation that they can and will be met and what are the penalties if they are not, embed this into your contract to have a guarantee of fulfillment.
- Security, standards and compliance: even if its not mandatory for your business to follow specific compliance requirements your provider always should. To guarantee security of your customers data and that the provider can live up to the promises they are making as your IT outsourcer they should be able to present you with certifications based on audits from independent agencies. Proof of successful validation and audits for SSAE 16, SAS 70, PCI-DSS, HIPAA, Safe Harbor, ISO 27001 and ISO 9001 are best way of finding out if the provider follows generally adopted standard procedures which in terms will contribute to the security of your data on many levels.
- Uptime and SLA: does the provider use structured and extensive monitoring of their services and can they grant you access to statistics of the last 3 years so that you can establish any service delivery breaches. What are the tools and real-time warning procedures regarding breaches in your service and what are their disaster recovery procedures and prevention methods. Is the Service Level Agreement suiting your business needs and requirements and in case of doubts can it be tweaked and adjusted to guarantee meeting your actual needs?
- Costs and transparency: make sure that all costs but also possibilities for additional services are clear and transparent, if needed verify that this information is to be found in your SLA and contracts before signing. Understand the costs and their structure and make sure that there are no hidden costs regarding any of the services you are or going to be using. Think in the terms of consultancy, implementation, development and integration, infrastructure expansion and support check if these services could have additional costs, be familiar with them and be certain they fit your needs and budgets. Understand if you want to and can work with fixed or variable costs and what services fall into each category. Identify capital expenditure if present and operational costs that will be tied to your provider and how they can fluctuate in your future due to your growth or change in pricing.
If you care about your providers corporate responsibility and you should, ask them what are they doing to give back to the society and how do they support local communities, do they contribute to charities, how do they address their carbon footprint reduction and how “green” is their IT. Always keep in mind that at the end of the day you are the one to decide and choose a provider that suits and meets your needs and not the other way around. Get multiple proposals and don’t be afraid of providers competing for your business after all you are in the same boat when trying to win over your customers so chose the best fit for your needs and requirements. Make sure there is an alignment of what your provider can offer with your mission statement and get from them what is needed to support your business. Get your team onboard and get them involved in the process of information gathering and decision making, think of concerns of the executives and other staff and how their involvement can impact the final decision. Following these steps will prepare you properly to make well informed decision which will have a great influence on the future of your business.
Written By: Martin Wielomski
My Google profile.