Which of the following actions is most effective in helping to select a service provider?

A company considers outsourcing its information technology support to a low-cost region on another continent. The company currently has no business presence there.

Which of the following actions is most effective in helping to select a service provider?
A . Contacting the country’s consulate for leads
B . Contacting the country’s local government for recommendations
C . Visiting several potential providers before making a selection
D . Finding a trusted local business agent to help in the search

View Answer

Answer: C

Explanation:

Selecting a service provider in a new geographical region requires thorough due diligence.

The steps involved are:

Initial Research: Conducting preliminary research on potential service providers through various sources, including online reviews, industry reports, and recommendations.

Shortlisting Providers: Creating a shortlist of providers based on their capabilities, reputation, and alignment with the company’s needs.

On-Site Visits: Visiting several potential providers allows for a first-hand evaluation of their facilities, operations, and culture.

It provides an opportunity to:

Assess Capabilities: Verify the provider’s technical capabilities, infrastructure, and resources. Meet Key Personnel: Engage with the management and operational teams to gauge their expertise and responsiveness.

Understand Local Context: Gain insights into the local business environment, regulatory landscape, and cultural factors that may impact the partnership.

Comparative Analysis: Comparing observations and findings from the visits to make an informed decision on the best-suited service provider.

Final Selection: Choosing the provider that best meets the company’s requirements and demonstrates the potential for a successful long-term partnership.

Reference: Sollish, F., & Semanik, J. (2012). The Procurement and Supply Manager’s Desk Reference. John Wiley & Sons.

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and Supply Chain Management. Cengage Learning.