In early 2014, my team completed a comprehensive RFP for a Microsoft Certified Provider. The RFP was conducted to address some growing concerns with the service level provided by the current offshore suppliers and the significant increased rates of US based providers.
Russell used six providers (4 US and 2 India) and most of the development work is done offshore but we also used US based companies for ad-hoc project work. The AppDev and Support cost in this area has increased 15% annually between 2011-2013, which is definitely a concern.
In the past, the selection of US based suppliers was based on the service managers’ previous experiences. Procurement felt that if we can find acceptable preferred suppliers, we can “encourage” the service managers to use them and enable us to consolidate the supply base.
The list of roles we typically used in this category are: PM, Developer, Technical lead, Analyst, BA, BI Analyst, Architect, Admin, QA tester, Web designer and Visual designer.
We conducted an RFP with 10 companies. The list included 7 US, 2 India and 1 Vietnam suppliers. The requirements were completed by our IT stakeholders and the scorecard template was completed by Procurement. The suppliers were shortlisted down to four companies – 3 US and 1 Vietnam. The India companies were unfortunately excluded by our IT stakeholders due to the deterioration of services over the last two years. All four shortlisted companies made an oral presentation to our IT service managers (facilitated by Procurement).
The service managers evaluated the technical requirements (i.e. capability, support model, capacity, and account management). I was pleasantly surprised that the Vietnam firm was rated highly by the service managers. It helped that the Vietnam firm has an existing Seattle office that currently support clients in the Northwest.
Russell consolidated the MS Applications Development providers to 2 providers. One provider is located in Vietnam and the second is located in the US. The recommendation was based on the selected providers having a combination of strong service delivery and lower costs. In general, Vietnam providers’ costs are 40% below our India rates and 80% below our US providers rates. Some of the projects recently completed by the preferred providers are MS Dynamic CRM rollout and SharePoint projects. The general feedback from our service managers has been positive.