Steps to Implementing an IT Outsourcing agreement

Step one

In the initial phase, an organisation must ask:

  • Why do we want to work with an outsourcing company?
  • What are the risks?
  • Do the benefits outweigh the risks?
  • What sort of relationship do I expect from an IT outsourcing company?
  • What sort of relationship will they expect?
  • Don’t take anything for granted.
  • How will we measure results and whether the relationship is working?

Step two

Analyse your business needs in the areas that you are considering outsourcing:

  • Are you looking to save costs/money?
  • Are you looking to re-allocate resources?
  • What will happen to personnel within the IT department?

Step three

Identify the right supplier.

  • Use Conjungo’s ‘Find and IT Outsourcing supplier’ search on the right of this page.
  • Look through magazines and online reviews.
  • Talk to others who have outsourced their IT department
  • Use forums, networks and personal contacts to obtain recommendations.

Ask questions such as:

  • Who has the experience of working with a company of the same size and profile as yours?
  • What are the qualifications of the personnel involved? Ask to see their CV’s – they must be able to have the expertise to do the job properly.
  • Are any of those suppliers local to where you are located?
  • How many similar installations have they made?
  • Ask for references – ensure that the company is capable and reliable.
  • Talk to a couple of their customers in order to see what benefits have been gained and what pains those customers went through when installing the system.
  • Obtain a credit check to ensure that they are financially stable.

Step four

Request a detailed proposal from three or four of your preferred suppliers.

  • Set a deadline for when you need the proposal back.
  • Give out details in advance as necessary to ensure that the suppliers you have selected can give you the best proposal.
  • Go and meet them in person – get a good feel for whether you will be able to work with them.

Step five

Select a supplier.

  • Who best demonstrates that they understand your business and your requirements?
  • Is it cost effective? Have they shown how and where you will save money?
  • Does it clearly demonstrate the functional benefits – rather than just listing particular features? Does the proposal clearly show what the benefits are?
  • Have you spoken to a couple of your preferred suppliers’ customers?
  • Agree on financial terms – Will the service be payable monthly or annually?
  • Agree upon the services or functions to be outsourced.
  • Agree upon a Service Level Agreement.
  • Don’t agree to anything more than a three year agreement.

Step six


  • Plan a handover with your IT outsource supplier.
  • You may need to run your IT department processes in parallel for a short time until the outsourcing supplier is fully aware of your IT systems and operations.
  • Communicate regularly especially in the early days in order to address any questions and issues.