Here's how you can evaluate the ROI of your IT Outsourcing initiatives.

ROI is not always revenue. Many times in IT outsourcing it can be about times or process enhancement. You better define that and put it in KPI languange so you can measure it. If you don't measure it you wont be able to improve it.

Always take a deep look at hidden costs. When outsourcing it is usual to take fro granted that costs are going alway to be lower just because youre outsourcing, and this may not be the case when you add up hidden or intangible costs (such as intellectual property). Each project is a different case and needs to be addressed properly. It is also important to consider the whole world as a potential source for outsourcing. this can definitely impact your costs, and can change the whole landscape.

When thinking about structuring the tender, it is important to ask the potential suppliers as to how they would provide benefits. In addition to financial benefits, it is important to understand from the suppliers themselves. I look for their experience in similar organisations, technology capability, culutral fit i.e. how they intend to embed into the current organisation and their view of measuring against service qualtiy and performance. It is also good to understand the bandwidth of services the supplier can offer as that can often be a limitatation.

Felxibility is the greates asset a partner can bring when outsoucing IT. You don't really want to get tighted up to the requirements of your providers, and you don't want to be always imposing yours. These partnerships are like marriages. Each party should bring their own, but should also be flexible to be able to meet common grounds. Flexibility should be tested in the first months of relationships and should even be contract bounded.

When considering IT outsourcing initiatives it is also important to include Intelectual Property/Competitive advantatge matters. It would be a bad business decision to outsource IT activities where critical business knowledge and competitive advantage is transfered to a third party...even worse if that knowledge is internally completely lost.

Consider nearshoring. Latin America brings a collective pool of advantages that is becoming more and more important because is bringing all the right elements to the table: cost advantages talented people same time zone cultural affinity fun people Of course, it takes a little effort, you need to go out of your confort zone to find these good deals, but it is totally worth it.