Many businesses have started outsourcing to Indian Internet IT service companies (software and web developers) as a strategic initiative to cut costs and to have access to intellectual capital not available in-house. Virtual Web companies are a natural outgrowth of the omnipresence of the Internet. But is the company just a web page or it a team of people with processes, and infrastructure?

The Trend

Companies are beginning to look to the emerging Internet Information Technology Services firms for help with everything from strategy development to interactive marketing to application development and integration.

India has become the leader in offshore contracting services (India owns around 80 percent of this market) because of its highly trained work force, low labor costs, and appreciation for software development disciplines and widespread use of the English language.

The Need to Evaluate

The content of the Internet is very diverse and it is necessary to evaluate what you find. Especially when it relates to appraising a "Virtual" company that one may never meet face to face. When outsourcing something as critical as IT operations and services it is important to form a "sourcing-alternatives" team to evaluate potential IT partners and determine what role each of the partners would play.

The job of translating the information to end products still takes place in a brick and mortar office where real people work. When the partners roles and their scopes are defined ambiguously, network deadlines cannot be met and end products may not meet set quality standards.

It is vital to select the right and capable vendor to ensure the success of your project. This will ensure that you get the best services or output for your money (on hardware and software), effort and time spent as these are the most important information resources in an organization.

Enterprises evaluating Virtual vendors for business projects are faced with difficult choices. The market is full of claims by many companies promising that they "do it all" and will deliver the enterprise into the E-business economy. Most do not have the breadth of skills necessary to develop and support the overall e-business needs of traditional enterprises.

The current dotcom meltdown proves that most of the Virtual companies though claiming to be up to any challenge, did not have the business model or the capability to deliver. Validating a company's claims can therefore not be overemphasized.

The How, Why and the Wherefore

Choosing the right company to outsource all your jobs to is not easy. It is very context sensitive and not any one single company will prove good for all your needs. It is important to identify the key technical and management issues in outsourcing. A few prime factors one has to focus on are:

• The vision and mission of the company in evaluation
• Balance sheets of the previous years
• Client lists
• Infrastructure

Clients seeking assistance from potential Virtual IT services providers should adopt a systematic approach to evaluating information on the Company. A few pointers include:

Examine the accounts that the company has handled. An Internet IT services firm that has worked with companies in similar industries with similar architecture will have first-hand knowledge of the issues with which a company like yours is dealing. If they have expertise in more advanced technology projects or have worked with startups it will be valuable.

Scrutinize if the company has its own expertise and business strategy as against a "will do all" claim. It's important to ascertain if the company is willing to collaborate as a team with the Client Company to develop its strategy and facilitate knowledge transfer. Any company should have a distinct easily recognizable strategy and it should be reinforced throughout the site.

Analyze the core technical competencies of the services firm. All companies will claim to support the development, integration, implementation and maintenance of your project, but this is rarely the case. A simple rule of thumb being no single company can have a presence in all possible areas. If any company claims so, it clearly shows a lack of focus. Ask for references. Finding a firm's strengths and weaknesses upfront will avoid costly mismatches later in the project lifecycle.

Review the resources of your vendor if it is not possible to physically visit the vendor's site and check the resources. Checking the hardware, software, network and communications will give an idea about the vendor's infrastructure. The vendor's experience and testimonials should be checked before proceeding further. If possible talk to their clients.