Carlos González-Yanes

Managing Partner

CRITERION Strategic Services Group

Founder InstitutePuerto Rico Summer 2012 SemesterAugust 29, 2012

Outsourcing, Partners and Suppliers…

Why?

• Speed and Scalability

• Expertise (Hyper-especialization and †echnification)

• Cost Structure and Cost Reduction

• Flexibility

• Competition…

What?

• Define what is REALLY Core and Strategic.

Everything else is Support…

… and can be Outsourced.

Then, what is CORE?

• Where Competitive Advantage is.

• Where Intellectual Property is.

• Where Mid-term Growth is.

• Where Flexibility, Speed and Control are game changers…

CORE is…

• Software Design and Architecture

• Business Intelligence / KPI Control

• “Code Integrity” and Standarization

• Corporate Strategy / Funding

• …

So, what to Outsource?

• Professional Services: Legal, Accounting, HR, …

• Marketing: SEO, SEM, Advertising, PR, Lead Generation, Graphic Design, …

• Technology: Infrastructure, Web Design, Mobile, Back-end Apps, Hosting, CDN, Support, Testing, …

• Operations: Administrative, General, Input purchases, …

Typical Enterprise App. Portfolio:• Portal/CMS• Payments/eCommerce• CRM/ERP• Project Management• Analytics/BI• Collaboration• Administrative

What is the level of control that I need with these?

Outsource the tool, but control it inhouse

Selecting Vendor

• What service?

• Can I start small and cheap?

• Can it scale up?

• How is the level of support?

• Where will it be in 5, 10 years?

• Support & Development Ecosystem.

How to do it?

• Identify

• Evaluate and Compare– Not only price

– Trusted advisors/references

– Expertise/specialization

– Flexibility/Fit-to-need

• Be prepared: study the market, understand current prices and trends, methodologies, proposal structuring, mix & combos, …

How to set it up?

• Standarized, performance-based agreements

• Trials/Pilots (start with something!)

• Prizes, penalties for delays, thresholds, …

• Service Level Agreement (SLA): Quality, milestones, evaluation, termination, …

• Performance monitoring/dashboarding instead of final deliveries

• Review, review, review (weekly, monthly, Q.)

Software Development & CodingEmployee Contractor/F

reelanceInsourcing/local Out.

“Nearshoring”*

Offshoring

Benefit Control Some ControlFaster Replacement

Some Control“Packages”Warranties

Lower CostPackagesJoint Venture

Price

Risk ExpensiveRotationAvailability

RetentionCommitmentIP lossConflict of Interest

Long TermCommitmentOverhead Preassure

Language/CultureLearning CurveProject Management

High risk for very small/lean businesses

Expertise/ SkillsRequired

Vendor Management, Project Management, Architecture, Web Design, Software Development, Testing, Operations, Support, …

(Availability / Cost :: High – Low)

Important:

• Use Technology to control and enhance Vendor/Partner relation

• Business & IT Strategies must be aligned

• Do not depend on one sole vendor but be careful not to overstretch

• Keep in mind that a robust communication structure (seriously!) has to be in place

• Never give away your IP and your Core

Thank You!

1200 Brickell Ave., Suite 1950Miami, FL 33131 USA

+1-305-310-2928carlos@criterionstrategic.com

Carlos González-Yanes