Selection of service provider should follow a clearly defined process – What to keep in mind

Filed by team twago on February 26, 2010

How do I find a professional service provider?
This is one of the key questions of almost any customer who is thinking about outsourcing or offshoring a task or process to a local (homeshoring) or a global service provider (offshoring).

A simple and easy way to find high quality services is to use service marketplaces such as twago, oDesk, and Elance.
We would like to advise you on the selection process.

This is the typical approach:

1. Creating detailed project specification

The Customer specifies the detailed project need and posts a meaningful description of the upcoming projects on the platform. Please keep in mind that the better your project description is the better (in terms of detailed and professional) the proposals of the service provider will be. Finish the process by submitting the project description (Request-for-Proposal, RFP).

Tip: Your project description / request for proposal should include:

  • Basic information on business or industry you are in
  • Goals behind the project
  • Detailed required outcomes
  • Selection criteria
  • Response definitions and guidelines
  • Accepted pricing models
  • Performance / relationship mgmt.
  • Contractual requirements

If you have a project of significant size and complexity we advise you to involve legal and procurement departments (if applicable).

Now you have two options to proceed:

  1. Manually invite only selected service providers and request a proposal from these short listed providers
  2. or let platforms like twago suggest you the best-fit service providers, which then submit a proposal/bid.

Once you have submitted your project, the service provider will address the customer with detailed proposals.

2. Evaluation of service provider

After having received enough relevant proposals, you should start the evaluation process. Identify potential service providers based on information available from public sources or even better from the provider’s profile on twago. Such information may include annual sales (on platforms like twago), headcount, location, skills and company history with all projects finished on the platform. The major advantage of professional platforms like twago is the transparency concerning the service provider’s performance in the past (check out the evaluations for your potential supplier). Customers do not need to rely on the glossy company brochures of providers but may focus their decision on reliable historical data.

3. Selection of preferred supplier

Evaluate the returned proposals. Make a quick scan to eliminate the obviously unacceptable bids. Evaluate the remaining proposals in detail, i.e.

  • Qualify ambiguous responses
  • Make a quantitative analysis of suppliers’ fit with your selection criteria
  • Make a qualitative analysis based on your opinion and respective research
  • If you intend to nearshore (outsourcing to a local service-provider) a visit of the provider’s site might be an option

Make a risk / consequence analysis of the bidders and include the results of step 2: evaluation of service-provider. Model the financials of all bids and select the preferred service provider

4. Negotiate and conclude contract

Discuss your project-details with the chosen service provider. Make sure that your supplier has completely understood you specification. Negotiate and conclude the contract.

Before project implementation starts, set up detailed project management process and tools. One way to do so is to use twago project management tool in order to avoid surprises during the project implementation.

If you need advice on any of the above mentioned process steps, feel free to ask the twago professional experts. Please contact us:

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About the Author ()

team twago brings you the best news about working online as a freelancer and finding the right freelancer for your projects. You can find tips, tricks and guidelines for using the twago freelance platform, plus much more. Team twago is made up of native speakers from several countries.

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