Carlos González-YanesManaging 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/

FreelanceInsourcing/local Out.

“Nearshoring”*

Offshoring

Benefit Control Some ControlFaster Replacement

Some Control“Packages”Warranties

Lower CostPackagesJoint Venture

Price

Risk ExpensiveRotationAvailability

RetentionCommitmentIP lossConflict of Interest

Long Term CommitmentOverhead 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