Part of my daily role as CEO at Savid Technologies iss to work with Small and Medium businesses and one of the quesiton I commonly get is about outsourcing. How can we outsource effectively? Or, what else can we outsource in addition to IT, etc so I thought I would give a small primer on multiple vendor outsourcing.
Now, as businesses grow, their vendor management process also increases in sophistication, and some company’s tend to transition from using a single outsource provider for application development to using multiple vendors. This multisourcing approach utilizes different vendors who specialize in different areas of application development and testing.
While I often hear relentless praising for the multisourcing approach, we should not forget that it does come with its own set of trade-offs and potential problems. Here I will examine the pros and cons of multisourcing:
+ Gain access to experts in their particular discipline. The most obvious advantage is the ability for you to leverage the expertise of vendors specializing in different disciplines. For example, you may use a vendor specializing in development and another specializing in testing. By using multiple vendors providing their unique expertise, you gain access to a wider pool of knowledge and skill than you would when only using a single vendor.
+ Save Money. Using specialized outsource providers means tapping into a smaller market with lower costs and less turnover than larger providers. A small, specialized firm can offer more expertise at a single discipline and for at less cost.
+ Higher quality assurance. The division of outsource providers establishes an independence between the different disciplines that should yield a higher quality result. For example, a testing vendor can provide honest insight about the developed software’s quality since they were not responsible for developing it. In this way, multisourcing creates a system of checks and balances that promote quality and lower risk of problems.
Now before you run to reassess your vendor management structure with multisourcing capabilities, you’d better first keep in mind these possible negatives:
- Increased vendor management. Onshore employees will have to manage, organize, and coordinate the output of the multiple outsource providers. Without a single outsourcer providing a turn-key solution, your company will have to use its own time and resources to manage the project each step of the way.
- Multiple vendor relationships. With the additional expertise of multiple outsource providers comes the management of additional vendor relationships. Communications suffer without a single point of contact, making it more difficult and time-consuming to on your end to manage and maintain vendor relationships.
As it goes with everything in the IT world, whether single-sourcing or multi-sourcing is right for your company depends on a set of individual circumstances, including the size and scope of needs of the company. It’s up to you to consider the pros and cons of each vendor management structure and be aware that there is no magic bullet solution.
An article posted at Illinois I.T. Association talks about the new IT Consulting thresholds and how the IT consulting paradigm is changing. What do you think? What are some of the changes you are seeing in the IT consulting model? Please post your comments below.
Step inside the mind of your prospective customer — the buyer of IT services and products — and you’ll see every possible flavor of fear, uncertainty and doubt (FUD).You’ll see fear of switching from the evil they know (their existing VAR) to your business. You’ll see the natural doubt any buyer has against a new (and untested) salesperson. You’ll see uncertainty from the misinformation your competitors use to cloud the buyer’s mind and get a foot in the door. Spend enough time inside your prospective customer’s brain and you’ll see that FUD is the direct result of not having enough information to make an informed buying decision.
So how do you overcome the FUD? How do you remove FUD from the transaction? We spoke to VARs and buyers of IT services about these questions and we’re delighted by the overwhelming response we received.
According to Tiffani Bova, research director at Gartner (www.gartner.com), worldwide IT channel sales, programs and alliances, “one way to remove the FUD factor in the sales process is showing prospects that you understand their business better than your competition, have done similar work for other companies like theirs, use the technologies internally yourself, and build a strong reputation around ‘service after the sale.’ These activities go a long way especially in the SMB space.”
Michael Davis, CEO of Chicago-based Savid Technologies (www.savidtech.com), removes FUD by offering a pilot program for all projects. “If it doesn’t work, we will take it out and charge them nothing. This forces us to test products internally before we sell them, that’s why we don’t have 500 products partners. They don’t all work and we only want to sell what will work.”
Some believe FUD need never really be an issue.
“In the initial sales process, the easiest way is to never sell at all – at least in the classic sense of sales. If the customer perceives you as someone taking a genuine interest in their problem rather than a sales rep hunting for a commission, the sale more or less completes itself,” said Kaustav Mitra, president of Mitra IT, a Los Angeles-based systems integrator.
But FUD exists beyond the sales call. Any new engagement has elements of FUD in installation, integration, support and service. Towner Blackstock, software services manager for CIS Consulting (www.cisinfo.com), a Charlotte, North Carolina VAR of Sage Software, reduces installation and integration FUD by emphasizing the importance of training. “Classroom instruction is essential to a successful implementation and rapid ROI. When clients neglect training on new software, frustration builds, confidence lags, and they spend more money on onsite support,” said Blackstock.
Blackstock also believes operations software can’t succeed without good hardware and networks. “That’s why we started our own IT group that specializes in software installation. This eliminates a lot of finger-pointing between vendors and allows our application consultants to focus on implementation. Even if a client doesn’t purchase our hardware, we have the in-house expertise to troubleshoot system issues.”
In the support role, having someone who is always available can minimize problems. Although it seems overly simple, Savid’s Michael Davis provides clients a contact list containing complete contact information for all employees. “Everyone in our company understands they must be available to all clients whenever they need them. All of our clients understand that not only are we available to them whenever they need, but we have an open door policy. You don’t like the way something is heading/running, call me or meet with me and let’s figure it out. In the end, the client is not always right but they are always right about what they want and how they want it.”
From a buyer’s perspective, Fred Held, a Los Angeles, California buyer of IT services in his role as principle of a private equity and management company, believes the VARs who focus most on overcoming relationship FUD are the ones most likely to succeed. “As someone who has hired many VARs in his career, I’m looking for the little things such as VARs that cost slightly more per day but the number of days they work is much lower. VARs that are available by telephone any time of day any day of the week and they are happy to hear from you. VARs that check to make sure what they installed is working well and the front line is happy.”
While removing FUD from the transaction is a good strategy for getting in the door, it remains a viable sales tool once you have established a relationship with the customer. Coley Perry, sales manager for Solution Partners (www.solpart.com), a Naperville, Ill.-based technology staffing and consulting firm, wants his customers to have just the right amount of FUD. “I want our customers to be so happy that the thought of switching to a new vendor causes fear, uncertainty and doubt.”
Security as the Tipping Point for Tech Infrastructure Consulting
I was thinking today about how current best practices for securing the enterprise and the continuing evolution of the threats is demanding a different perspective on how to build, develop, and secure a robust infrastructure for the a decentralized workforce.
This post is my opinion on how the new kind of IT practitioner is meeting these challenges in a more horizontal way. In fact, the whole idea of “infrastructure” has been undergoing a deconstruction for years, certainly ever since the Internet became a meaningful business environment. It’s no coincidence that one of the fastest way to identify old-think tech folks is how they treat security. And it’s probably true that “as goes security, so goes the rest of tech consulting work.”
It is usually pretty easy to spot the “security guy” that doesn’t actually get security. He is the one that says you need to do X to “protect yourself from the external attacker!” Sorry to tell you but the external attack is dead. We have spent the last 10 years building so many moats around our villages (our networks) that we forgot to realize that the village idiot lives on the inside right next to the king. Security is not just about the external attack. Security is involved in every part of the infrastructure from the WAN to the PDA to the digital camera an employee brought in to upload some photos.
Internal users, whether they are located in your building or not, are more of a risk today than ever before as businesses decentralize and build more mobile work forces, outsource, offshore. The lines that old school security engineers relied upon and used to delineate “security zones” are disappearing. A holistic security plan has always been preached in the universities, books, and training seminars that security engineers and security consulting firms have attended. What has changed is that holistic security used to be a nice to have but now it is a must have. Consulting firms still do not understand the business reasons for a specific security technology, don’t understand the technology itself, and very few work with the customer to ensure the product succeeds at actually reducing their risk.
The village idiot is unable to steal from the village if all the villagers’ doors are locked and windows shut. The new IT practitioner understands this approach and how the various security technologies work together to form a strong infrastructure. It is not about what Product X can do for a specific risk, it is about how that risk reduction affects the other risks within the organization. It’s about balancing the risk with the return.
This change requires a different perspective when building, developing, and implementing secure and robust infrastructure. Organizations must meet the challenges proposed by a holistic security approach and realize that since the advent of the Internet businesses have decentralized their infrastructure without decentralizing the security infrastructure. As the two become more and more decoupled from an architecture and geographic perspective they will actually become closer to each other in regards to the organization’s risk. Neither the technology infrastructure nor the security infrastructure can succeed independently.
Organizations purchase and implement technology to solve a problem.
Too often, the problem isn’t solved but simply morphs into a new problem. Like squeezing a balloon; it comes into line over here, and protrudes over there. Working with a consulting firm that truly understands the technology provides much higher returns for the IT organization than integrating a “turnkey” product that a smooth talking salesman sold to the IT director. The problem with IT consulting firms today is that they claim to be “best of breed” for a specific technology but they are not best of breed in a specific technology they are “best of breed” in a specific product that implements the technology. There is a critical distinction between understanding product features and understanding the fundamental technology behaviors that the product organizes. It takes critical thinking and true understanding of where the product might solve a point problem, but how its technology can be used by the organization to ensure a successful engagement with a customer. This “new” IT consulting firm is different than the so called “solution providers” we see today. Solution provider is the new word for product pusher or VAR. Solution providers still do not understand the business reasons for a technology, don’t understand the technology itself, and very few work with the customer to ensure the product succeeds. Project success is what the new breed of IT consulting firm is selling. At Savid, to ensure success, we offer all of our customers a rapid-cycle pilot program for all implementations. They try it before they buy it. Essentially, the pilot program becomes a lab-like environment where the testing, education, and production implementation issues are worked out . If the technology just doesn’t work or can’t meet the expectations set at the beginning of the engagement, we pull it all out on our dime. We work with IT to make sure they are successful. By doing so, we are successful because we are thinking beyond success with our customer, the IT department, to our customer’s customer: the business.
Case-in-point — We were implementing a central faxing solution for a financial customer with 5 locations and many fax lines. They wanted automated routing of incoming faxes among multiple sites. After working on a pilot program with two locations, we found out that the methods by which the customer wanted to use the technology wasn’t the way it is traditionally utilized. Because we understood all parts of the underlying technology behaviors, we were able to work with them to provide an additional custom application that modified the product’s capabilities to meet their organization’s need for complex routing. On the strength of the pilot, we expanded the program to all locations and the project was a success. If we had just sold them a product, the engagement would have died right there, with bad feelings all around, because the product didn’t do what they wanted. . Our agility and true understanding of all the pieces of technology affected by the fax product enabled the project’s success. Furthermore, the unique requirements were requirements from outside IT. They were traditionally business and process requirements that the IT department would have had to meet no matter what vendor or product they purchased. By working with IT to ensure their customers were happy we created a long lasting relationship with IT. Many IT consulting firms will argue that the IT departments within these organizations partially to blame for the problems with most consulting firms. Some IT departments are but most are not. The IT department works with a solution provider or VAR and becomes convinced that product X will solve problem Y and they give it their best attempt at success. The problem is that the solution provider shouldn’t have just worked with IT. IT affects all areas of the business. IT is the foundation of every major enterprise today. On top of that foundation every pillar such as operations, sales, etc exists. If IT makes a decision it must consult with and take into account all of the areas it supports otherwise part of the foundation will crumble. In a recent Society for Information Management survey, CIO’s responded that they spend 36% of their time managing relationships internally with the business and IT (See Information Week, Nov 19th 2007) and another survey of CXO’s taken by Information Week last month says 43% of business manager now take more responsibility within IT projects. Your solution provider should be doing the same and think beyond the IT department.
The “new” consulting firm will work with the other areas of the business, ensure that the technology will meet their requirements, and ensure success of the entire engagement. Doing so will ensure that the organization’s IT department, their customer, is successful. IT is not a vertical within an organization, it is the horizontal foundation that with assistance from a proper IT consulting firm will be able to enable the business innovation required for the business to grow. There are other benefits to working with the business along with IT. Working with the IT department to ensure that all of IT’s customers, the other business units, are happy with a technology or implementation elevates the role of the IT consulting firm from implementer to trusted advisor. Our engagements have created lasting relationships with VPs and directors of other business units to the point where we had non-technical directors and manager contacting us asking what we thought about the wireless, and new regulations when they first started to appear in the market. They wanted our valued opinion about a technology they didn’t understand and valued our response. Building a relationship of trust enables our clients to leverage our relationship to become successful in their career, a major goal for all professionals.