By Floyd Piedad

One of the biggest risks you face when employing a third-party provider is reduced availability. Low system availability not only infuriates users, but it usually defeats any possible reason for employing a third-party provider in the first place.

When your IT organization decides to outsource a service that it traditionally provided directly, that decision will create an intermediary layer of service delivery between IT and the end users. This intermediary layer should be transparent to the end users. The simplest measure of a successful outsourcing is that end users should continue to think that the service is provided by their internal IT organization, and that the quality of services provided is the same, if not better.

In my book “High Availability: Designs, Techniques and Processes,” I emphasize the fact that a system is perceived as always available if the following is true:

  • The system is accessible when the user needs it.
  • The system always provides timely, accurate results.
  • The system is easy enough for the user to actually use it.

The critical element here is that high availability is measured from the user’s point of view. When availability is low or nonexistent, from the user’s point of view the third-party provider becomes obvious and is no long a transparent, silent partner with the IT department. Once your third party’s “cover” is blown, the entire success of the outsourcing effort is compromised.

To avoid an outsourcing failure of this magnitude, follow these three golden third-party rules:

Rule 1: Trust no one completely
The terms and conditions of the service to be provided must be clearly stipulated in a contract. Never take your provider’s word for anything.

Ensure that the contract provisions at least cover:

  • Service availability hours, performance guarantees, and a list of responsibilities.
  • Support coverage hours, mode of support available (for example telephone, e-mail, on-site), and escalation procedures.
  • Contract penalties, termination clauses, renewal, and continuance terms.

An important point to consider is what penalties the vendor incurs when the service is poor or unavailable. This penalty amount almost certainly will be trivial compared to your business losses, but the higher the penalty stipulated, the higher the vendor’s own motivation will be to make its service perfect.

The better providers will give rebates or free advanced subscriptions if their committed service levels are not met. Even better is a provider who will ensure against business losses for service unavailability.

Rule 2: Make it easy to switch providers
Never assume that your good relationship with your outsource provider will stay that way. You must have an exit plan in case the outsourcing setup is no longer beneficial to your company. First of all, ensure that there are no contractual or legal impediments in ending the agreement prematurely. To help drive your point home on this issue, you can simply tell the potential vender that as long as its service is excellent, you will be satisfied and will not be forced to preterminate the contract.

In addition, with the way the economy is going right now, you can never be sure if the service provider you use will still be around next month. So your exit strategy should also plan for the possibility of a sudden loss of service provider.

On the technical side, make sure that you store most of your data, or at least keep the amount of data you don’t store to a minimum. This will allow you to restore service through another provider quickly and easily, while keeping any required reconstruction to a minimum. When you have a stable system, document the entire system setup from hardware to network to software setup, so that you have all the information you need to restore on another system. In the case of an outsourced Web site, for example, make sure you have the server software version it is running on, as well as any patches that have been installed, and so on.

Rule 3: Manage your providers
Successful outsourcing experiences are those in which the clients carefully manage the service providers. By “manage,” I mean providing adequate and timely feedback when things don’t seem to be right, invoking and criticizing the provider’s support facilities, and keeping your provider abreast of future changes or potential problems that you might have. Bad outsourcing experiences are most often the ones in which the client takes a backseat approach, giving the service provider too much leeway and control.

An important tip here is to always keep a file of documented communications between you and your service provider, especially if these affect the service terms and conditions, pertain to problems and solutions, or involve technical changes to the outsourced service.