When adding work to an existing “already sourced” portfolio, there are several considerations one should consider each time. While it is often an easy decision to choose a quick solution or the incumbent service provider, something important typically gets overlooked in these scenarios.

1.  Understand how big it is. Before you bid something out, do your homework and understand what level of effort is required to do the work you are bidding out. If you were to do the project, how many people and what skill would be required, and how long would it take? Is it a simple project with few interfaces, or does the project have tentacles throughout the organization? Is the knowledge required to complete the project localized, size, leadership and technical expertise components of the project before you award the or is it spread throughout the globe?

2.  Verify the service provider’s ability to do the work. Verify the ability
of the service provider and particularly its team as proposed to you to do
the work. Once you know the size of the project, you must make sure that the
service provider’s team has the same order of magnitude size perspective
that you do. The service provider needs to commit to the team business.

3.  If it seems too good to be true, it probably is. If the service provider
underestimates the magnitude of the project, the duration, the complexity or
the risk, it may offer a very attractive price. If the price doesn’t look
right (too low or too high) given your understanding of the size of the
project, verify scope and expectations with the service provider before
proceeding. Remember, the service provider would not have gotten this far in
the process if you didn’t think they could do the work, so now make sure
they understand what that means.

4.  Contract for risk and incentives. Some risk is inherent in any contract
arrangement, but minimize risk by being clear on your responsibilities, the
service provider’s responsibilities and the required deliverables. Be clear
on acceptance criteria. Make sure the service provider has incentive to
deliver a successful outcome by your measure, even under the worst-case
conditions. If nonperformance or delay by the service provider will cost you
money, the penalties for these conditions should be structured to be in line
with your risk exposure.

5.  Manage the results of the contract. Don’t “fire and forget.” Designate
someone responsible to you as the client project manager, even for small
projects. Depending on the size, your project manager may need assistance
from other technical resources or coordination assistance from other parts
of your enterprise. Make sure all of these resources are lined up before the
service provider is contracted. Have periodic meetings. Project-level
meetings handle the daily workings of the project, and the executive-level
contacts keep lines of communication open in case they are needed.