Taking the pain out of IT Sourcing
Three success factors for successful IT sourcing: In this article, Ventum Consulting presents the basic attitudes and behavioural references relevant from our experience for a successful tender.
Every sourcing project is different. At Ventum, we have seen our fair share of gathering demands, bundling services or resource units and supplier pitches. But when it comes to putting the contract into action, the characteristics of our customers' organizations collide with all the ones and zeros agreed upon. It's no news that after the honeymoon phase of new sourcing endeavours one often needs to look at those ones and zeros to resolve conflict and refocus both parties' energy on delivering & receiving the services outsourced. To avoid these misunderstandings and to find the right supplier for your organization, a couple of things should be considered.
Honesty, for both parties involved, is a terrific way to start. In terms of the point I am trying to make, honesty aims at the client's internal capabilities. We have seen large clients with standardized service delivery reports and we have seen clients where a managed service has never been awarded before. In the latter example one can easily avoid the nightmare of seven figure offers when your budget is in low six: Ask yourself what your service owner wants and what her expectation of a service delivery meeting is. Furthermore, if an internal resource has been delivering the service before, can you really justify going from best effort internally to 99% uptime based on business criticality? If you are one of those highly standardized companies simply ask yourself: who is looking at all those reports and do you really need every single one of them to steer your service provider? It goes without saying, but all service owners in your organization need to support the underlying goals you are trying to achieve with the contract at hand.
IT service providers sometimes come across as predators. With big legal departments and contract management experts, clients are easily intimidated. From our experience, there are a lot of very capable companies that exist among those predators. Your account manager's goal is to grow the share of your wallet. This is not going to happen if you are constantly overreached. Instead, a solid service provider wants to collaborate and identify areas in which an extended partnership might be fruitful for the both of you. Of course, they want to sell blockchain, big data and whatever the flavour of the month might be. But besides all trend-induced sales efforts, a provider gets to know you and your organization and part of the money you are spending is justified by the experience and know-how gathered across various industries. Use this knowledge and see if there is way to grow together. Bounce ideas off of your new partner by simply asking how they would migrate to Office365 or replace your firewall with minimal downtime. There is a good chance that they have done this before. For them it’s presales for you it might be a reality check.
Take your time
Every single sourcing project is rushed. Contracts are up for renewal and the purchasing department needs six months heads up - that's a given. On top of that your service owners are probably in the middle of an important transition and do not have time to put their demands into the Request for Proposals. If you want to create a positive impact with your IT sourcing project and maybe save some money along the way you need to take your time and allocate the resources in a matter that whatever you are sending out is not a copy & paste job from the contract signed five years ago. Things have changed, they always do. New things might be on the horizon - account for them. Get your numbers straight - are we talking about 100 or 1000 tickets? Allow time for quality management - you don't want your providers pointing out all the ways you contradicted yourself, do you? And please, account for the future. Working together, as stated in the previous section, is important. Develop a flexible collaboration model, both commercially and from a service perspective. You do not want to change the contract every time a new technology reaches a critical market penetration or, even worse, start yet another sourcing project.
This is only a high-level starting point for what I hope will turn into an interesting conversation about IT sourcing. To start the exchange, share your experiences and hints for a successful sourcing project in the comment section.
I will continue to post articles about sourcing, but if you would like me to focus on a certain subject, please let me know.