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Where Do Mid-market IT Directors Look For Outsourcing Partners?

Every CIO who is pursuing an IT strategy that includes outsourcing and offshoring is searching for the perfect outsourcing partner(s). Sometimes it takes two or three tries to find the right supplier, but if you can clearly define what you are looking for there are some terrific players in the mid-size market who will listen to your IT needs rather than dictate what you need. I have spoken to several mid-size IT directors who feel that the bigger players are not really listening or prioritising their requests, illustrating the challenges facing mid-market IT directors as they try to develop a strong business case for an IT outsourcing strategy: finding the right outsourcing partners in the right place for the right price. Some of the most common challenges can best be summarised as:
- Limited visibility to the mid-market size vendors... its fragmented. It's difficult to determine which are the reputable suppliers, and where are they located.
- Smaller supplier don't have the big marketing ££, so they do not sponsor large events or spend a great deal on advertising.
- Generally, IT directors prefer to avoid the risk of working with lesser known service providers. As the saying goes, "No one was ever fired for using IBM."
- Lack of in-house skills and resources to manage the outsourcing relationships effectively.
- Tier 2 and 3 offshore providers have smaller (and sometimes no) local presence.
- The perception that outsourcing and offshoring is reserved for larger enterprises, not the mid-size market.

But how valid are these concerns, and are they more myth than reality? From my personal experience the success of an outsourcing engagement depends more on the scale and scope of the work than on sheer company size. As we have seen in several reports, if a project is too small, the benefits of offshoring won't outweigh the costs. As a mid-market IT director, it is crucial that you run through several steps before considering a new partner:
- Document the current IT landscape.
- Develop a strong business case for outsourcing any of the IT operations.
- Have you got the time and resources to set up a productive relationship with a vendor.
- Define what your business needs from a vendor partnership... what vendor attributes are important i.e. cost, quality of people, industry knowledge, technical expertise.
- Do detailed research & due diligence on mid-market suppliers.
- Attend events and speak to other similar sized businesses that have gone through the process.
- Bring at least 3 suppliers into the bidding process to help obtain competitive prices.

There are several benefits from outsourcing to the right mid-market partner. A midsized outsourcing firm is more likely to go the extra mile for smaller clients, and when you escalate, it will be directly to the leadership team. Smaller vendors often have to be niche specialists to survive, and they can bring new ideas and fresh approaches to the table. Often, mid-market service providers are run by ex-top talent from the tier 1 suppliers, and they are able to attract more talent to the their new business. I believe that if you are a mid-market company in the UK, US or Europe, you can reap significant improvements in efficiency, productivity and pricing by sourcing with mid-market service providers.

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