Reduce IT Procurement Time And Risk
Written By: J. Dowling
Published On: March 12 2001
Reduce IT Procurement Time And Risk
All one has to do to get the best product at the best price is to identify
every requirement, find a product that meets all of the criteria, negotiate
the best price and get it all done before the product becomes obsolete
or the supplier goes out of business. Many successful and not so successful
selections have been made. Learn from those efforts and remove time and
risk from your next selection.
are few tasks that IT managers must undertake that present so much uncertainty
and risk as is involved in the selection of a new technology product.
The list of questions is seemingly endless:
- Do I
have all of the customer requirements?
I identified a good set of suppliers?
- Do the
suppliers really understand my needs?
- Am I
asking the right questions?
- Do I
really understand the answers that I am getting?
factors should drive my decision?
- Do we
have consensus around the decision?
- Am I
getting the best price?
This note first appeared in a column by James F. Dowling in Mid-Range
Computing. Look for other previously published Mid-Range
Computing columns by Mr. Dowling at this site or visit Midrange
Showcase at www.midrangecomputing.com/showcase/.
Selection Myths and Magic
Research into hundreds of product and supplier selections has revealed
myth and magic of IT product selection.
#1 - One can compile a complete set of requirements for a given technology
application. Forget about it! Product capabilities and both the technical
and business environments change so quickly that a list that is comprehensive
at the beginning of the process is short by twenty percent or more by
the time the solution is implemented.
Response #1a - Consider future requirements and applications of the
solution when establishing the requirements list. Employ a selection process
that allows significant change to requirements right up to the day that
a supplier is chosen and a deal is closed.
Response #1b - Explain the business and technical situation to several
suppliers and have them suggest solutions. Often, buyers rush to understand
product offerings by generating a Request of Information and then trying
to decipher the responses. Invite a small number of suppliers to listen
to the story and suggest approaches along with products. This will result
in a very rich set of requirements for the ultimate solution.
#2 - An internal Technology Research Team is necessary to identify potential
solutions and drive a successful selection program. It can be fun
but it is not essential. A dedicated research function can be beneficial
only when a well defined information technology architecture and application
deployment strategy are in place to guide its efforts.
Response #2 - IT suppliers know their products, how other companies
employ them and what their competition is doing as well. Good relationships
with a small number of suppliers can provide ready access to state of
the art product information. Suppliers can also provide access to their
customers who have considered other products and can provide insight into
the most important selection considerations.
#3 - There are a "vital few" features, functions and characteristics that
should drive the selection process. Remember the Velociraptor from
Jurassic Park. One stands out in front of you while two attack from the
sides. It is very hard to assess several supplier's offerings when there
are many factors being considered so the tendency is to constrain the
number of criteria. It is clear that an eighty percent fit to the criteria
list is pretty good. However, often as not, it is the sum of ten to fifty
factor shortfalls that causes project problems during implementation or
Response #3 - Let the list grow to exhaustion before grouping requirements
and then assign weighting factors to each group and factor within the
group. Expose the list to suppliers and /or technology experts early in
the process and work with them to identify those that can be satisfied
equally by most suppliers and those that truly differentiate suppliers.
By doing so, focus can be brought to the gap between all offerings and
needs (project risk) and the gap between specific product offerings.
#4 - RFI, RFP, Customer Visits and Demonstrations will provide enough
information to make a decision. I'll let Will Rogers address that
one. "It ain't what you know that gets you in trouble, its what you know
that just ain't so." Technology application is successful when the business
and technology environments come together with good process fit and product
capabilities. Every business problem has existed before, but every business
and technology environment is different.
Response #4 - Have your people (technical and business) execute your
business processes with your data on each supplier's product. As your
team designs a set of scripts that will be used to evaluate products several
essential revelations will take place: The mainline process has a dozen
exceptions, The data in the current systems is contaminated with errors
and inconsistencies, Your configuration changes adversely affect system
performance, and additional processes and systems will be involved. As
the scripts are executed, people will reconsider weighting factors and
selection criteria. Most of all, all parties will come to a shared understanding
of the goals, capabilities and risks.
Selection Myths and Magic (continued)
Myth #5 - Consultants can do this for us. Consultants can indeed
accelerate the process and bring issues to the attention of their client's
team. However, only the buyer's team can really know what is needed and
what will work.
Response #5a - Employ consultants to provide a process, rigor, coaching,
knowledge bases and familiarity with suppliers and products. Work with
the consultants and let them push the process along. Trust the process
and challenge their knowledge along the way to obtain the speed and thoroughness
needed for a good selection and to transfer as much knowledge to the team
Response #5b - Keep selection and implementation separate. Many companies
and government agencies prohibit design and selection consultants from
bidding on implementation projects that are directly related. This assures
objectivity and impartiality throughout the program.
Response #5c - Build a team of Expert Stakeholders to carry the process
from beginning to conclusion. A good selection process places only essential
work effort onto the client's team thereby making it practical to have
the right people on the team from the get go. Expert Stakeholders are
not always senior managers. Rather, they are respected, influential, knowledgeable,
people with experience in the most significantly impacted areas.
#6 - It is not an IT project. If it involves IT, of course it is an
IT project! The fact that it is business driven and led does not in any
way remove the bull's eye from the back of the IT teams.
Response #6 - Run the project on two tracks. The track described above
is principally business focused. Set up a parallel track of IT professionals
who examine current infrastructure (people, process and technology) and
establish a set of architecture, product and practice standards that will
be used to evaluate product candidates. While the Selection Team proceeds
through execution of evaluation scripts, the Technology Team examines
technology related risks and project scope. Bring both teams together
with separate points of view then combine them into a single recommendation
and risk analysis.
All right, so you knew about the risks and the magic is just structured
hard work. I know for sure that the process seemed like magic when presented
to dozens of teams who have struggled through selections with great trepidation
and varying degrees of success.
column will continue to explore the change/size paradox-big companies
desiring speed and growing companies desiring stability. The author would
appreciate feedback on material presented as well as suggestions for future
study and reporting. The general theme is IT management and the goal is
to make it easier to get clients what they want and what they need to
Jim Dowling is VP of the Alignment Consulting Practice at TechnologyEvaluation.Com,
Inc. located in Woburn, Massachusetts. TEC researches IT products and
suppliers as well as the ways companies obtain business value from IT.
TEC's consulting services remove time, risk and ultimately cost from IT
Jim can be reached at jdowling@TechnologyEvaluation.COM.