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It's Best to Outsource When Creating Company's Web Site

June 17, 2002

Executive Roundtable is a weekly column by TEC Worldwide, an international organization of more than 7,000 business owners, company presidents and chief executives. TEC members meet in small peer groups to share their business experiences and help one another solve problems in a round-table session. The following question and answer are a summary of a discussion at a recent TEC meeting in Southern California.

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Question: My fledgling firm has grown to the point where it makes sense to start doing business over the Internet. I'd like to build a Web site in-house because I feel that would give me more control over the final product. However, I'm not sure I can afford to hire the staff to build and maintain it. Should I outsource or bite the bullet and bring people on board who can get the job done?

Answer: Unless you have a sophisticated in-house information technology department that can dedicate the time and resources to building your site, chances are you will find it much more efficient and cost-effective to outsource.

Terry Schulenburg, president of Master Designs in South Barrington, Ill., believes that outsourcing offers additional advantages that go beyond the underlying cost issues. First, the Internet and the technologies that support it change daily. Unless you build Web sites for a living, you may find it impossible to keep up with trends and emerging technologies.

Second, vendors provide faster time to market. A good vendor working under closely supervised deadlines can get a Web site up and running much faster than a company that's trying to take care of customers and create an online presence at the same time. In addition, experienced vendors can help you avoid costly mistakes because they already know the pitfalls that can derail most Internet projects.

Finally, outsourcing enables you to maintain a certain distance from the project and take a much more strategic approach. It allows you to remain focused on your primary business objectives while the vendor worries about making the technology work.

To outsource successfully, Schulenburg says, select your vendor from among several bids. When researching vendor candidates:

* Check references carefully. Browse several Web sites each vendor has built, checking for functionality, ease of navigation, visual impression and other key components of a good site. Talk with a variety of the vendor's clients. Was the vendor easy to work with? Did the vendor deliver as promised, on time and within budget? Does the Web site do what it was designed to do?

* Know the vendor's capabilities. Web design firms come in all shapes and sizes. Look for someone who understands your business goals and objectives and has the expertise to build a site that will support them.

* Check for cultural fit. Keep in mind that you will interact regularly with this person or team for several months, so make sure the vendor has a project management and communication style that you can work with.

* Demand transfer of knowledge. Once your site is up and running, you shouldn't have to run to the vendor every time a minor change is called for. Avoid vendors who can't or won't train someone on your staff to update and maintain the site.

* Choose your bid carefully. A "time and materials" contract offers more flexibility, but once the vendor goes on the clock, expenses can quickly get out of hand. In contrast, a fixed bid keeps your costs in check but makes it harder to shift directions midstream. Even minor changes to the plan can require a written change order and additional fees.

"A fixed bid will usually get you to market quicker," Schulenburg notes, "but unless you give the vendor very clear guidelines, you may end up with a Web site that doesn't meet expectations. On the other hand, if you go with a time-and-materials bid, don't strive for the perfect site or you will never get online. Instead, get your site up and running as quickly as possible and then make any necessary modifications as you get feedback from customers.

"Either way, outsourcing should save you time and money compared to doing it in-house. The key is to make sure your strategy drives the technology and not the other way around. There's no point in having a Web site if it doesn't support your long-term strategic goals."

If there is a business issue you would like addressed in this column, contact TEC at (800) 274-2367, Ext. 3177. To learn more about TEC, visit www.teconline .com.

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