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Reduce IT Procurement Time And Risk

Written By: J. Dowling
Published On: March 12 2001

Reduce IT Procurement Time And Risk
J. Dowling - March 12, 2001

Introduction  

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.

There 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?

  • Have 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?

  • Which factors should drive my decision?

  • Do we have consensus around the decision?

  • Am I getting the best price?

Note: 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/.

IT Selection Myths and Magic  

Research into hundreds of product and supplier selections has revealed myth and magic of IT product selection.

Myth #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.

Magic 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.

Magic 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.

Myth #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.

Magic 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.

Myth #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 operation.

Magic 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.

Myth #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.

Magic 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.

IT 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.

Magic 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 as possible.

Magic 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.

Magic 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.

Myth #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.

Magic 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.

Conclusion  

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.

This 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 succeed.

About The Author  

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 related decisions.

Jim can be reached at jdowling@TechnologyEvaluation.COM.

 
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