The lesson is clear: Organizations that pursue equitable and ethical treatment of their personnel have an advantage over those that run roughshod over their employees and ignore these delicate issues. Remember this--every day that people are uncertain of their future is a day when you will get very little, if any, productive work out of them.

There are several steps you can take to reduce the amount of uncertainty and the length of time skepticism exists in these cases. First, pick an outsource vendor based on its ability to do the job, not on its ability to charge you less. Your organization is going to have to live with the results of your selection and rely on the outsourced system, so quality truly counts. Second, communication is a strategy, not simply a nice way to do business. Make sure the communications between manager and vendor-representative are regular, comprehensive and consistent. The outsource vendor should simply do the job better and with greater economies of scale than you can. Therefore, at least in principle, the outsource vendor should provide similar benefits, salaries and job functions. Don't forget the pure human resources function of recognizing time on the job for purposes of vesting. These and other ideas were presented by Digital Equipment Corp. (now part of Compaq Computer Corp.) in "Inside Outsourcing," at www.nwc.com/914/914f2.html.

How Do I Pick a Vendor? Once you've decided which system(s) to outsource and you've outlined an approach for the affected employees, you have to decide how to select the outsource vendor and how to manage the relationship on an ongoing basis. Both of these decisions have significant effects on quality. For instance, a vendor selected based on politics or price alone may not be qualified. Without clear boundaries of customer and vendor responsibilities or regular reviews, tasks slip, disputes may arise and customers may suffer.

Once we begin to see outsourcing as a common, everyday tool to apply to development and operational projects, it follows that we need to plan for and manage it as part of those projects. Don't think of outsourcing as a disconnected, standalone effort. For example, in The Capability Maturity Model for Software (Paulk, et al, Addison-Wesley, 1995), the authors treat subcontract management as part of overall project tracking and oversight. Key to their approach is the process of defining a portion of work to be performed by another organization. The first step is to define the work to be done--specifically, write it down! Once documented, that definition is reviewed and agreed upon within the organization. In turn, that becomes the basis for evaluating the bidder's ability to perform the documented tasks.

Simply said, you shouldn't assume that you will have a successful outsourcing experience if you can't agree on and document which tasks will be performed. After that's been accomplished, you can base your decision on the vendor's ability to perform your needed tasks, not the bidder's ability to convince you of extraneous factors.

The quality of an outsource vendor's product is controlled by you, the customer. You accomplish this through requirement-definition documents. Creating those documents out of the ether of legacy systems and operations is a significant task. However, several quality-management schools of thought, including ISO 9001, Motorola Quality System Review and the Capability Maturity Model, view requirement-definition documents as the key to contract management. Contract management is the only mechanism available to you to enforce service levels.

How Do I Manage? Your work in creating the requirements, drafting the contract and managing the transition of talent to the outsource vendor needs to be followed up with regular reviews. Spell out milestones and escalation procedures in the contract. In an ideal situation, a third party could be brought in to follow up further and audit the results.

It's important to understand the framework of outsourcing and contract management, since the market will continually create variations on the outsourcing theme. Web-site hosting is an obvious example. More subtly, carriers and ISPs will craft products all the way up the stack to Level 2. Soon, traffic grooming, QoS, VPN and directory management will be products provided by carriers on top of today's fat pipes--in effect, you'll have the opportunity to outsource those functions to a carrier. However, trusting a carrier to implement your policies will not happen in a vacuum. For carriers to start provisioning at higher levels in the stack, they'll have to start crafting contracts and managing services, not pipes. For users to take advantage of whatever economies of scale those carriers provide, managing the carriers, including outsource vendors, will be necessary.

Brian Walsh is the founder of bwalsh.com, a Portland, Ore., consulting firm specializing in Internet and client/server product strategies, development and testing. Send your comments on this column to him at www.bwalsh.com.