New York April 11, 2002 With many technology implementations destined never to achieve the promised return on investment, companies considering investments in new solutions should focus on the practicality of proposed solutions, accountability for results, objective measurement and a tangible return that justifies the investment.
Such is the advice of technology consultancy Tigris Consulting, which has issued an information technology (IT) services buyer's guide to assist companies as they consider their IT implementation options.
As the demand for innovative, outsourced solutions to business problems has increased dramatically, so too has the number and complexity of IT consulting options. With this has come more confusion and skepticism among purchasers of these services as they attempt to filter through the myriad providers and their promises.
Meanwhile, some industry analysts assert that only 8 percent of information technology (IT) spending on new initiatives completely achieves its stated objectives and delivers significant value. "This is a staggering rate of failure," said Tigris CEO Brent Habig. "Many billions of dollars have been wasted on services and solutions that do not work as promised."
Habig proposed that these issues could be addressed through a more methodical evaluation during the IT buying process. "A few additional considerations during the sales cycle can markedly improve the likelihood of a good fit between client and partner," he said.
Tigris' IT services buyer's guide, based on the company's own experience with its customers, may play to Tigris' own strengths, of course, but if nothing else, the guide, which follows, provides a useful checklist for executives entering into a professional services selection cycle.
Information Technology Services Buyer's Guide
1. Know Thyself
- Define the objectives of the proposed initiative, including tactical achievements and desired, long term impact; also define likely challenges and constraints, both internal and external.
- Create tangible, quantified metrics and benchmarks to measure success and a rigorous audit process of project results.
- Know your budget parameters and timing requirements; decide where investment risk will reside with consultant via fixed price and fixed delivery time or with the buyer via time and materials structure.
2. Know Thy Market, and Its Motives
- When assessing outside solution providers, distinguish between those that seek to sell products and those that seek to build client relationships.
- Present your business case in clear language along with performance metrics and rewards/consequences for achievement.
- Gather ballpark pricing data from each vendor at the beginning of the sales process.
3. Prospect Playback
- Ask all prospective partners to invest some time to complete your business case, with a clear discussion of the proposed process as well as the features and benefits of the proposed solution.
- Request an assessment of risks, mitigation plans and risk/reward sharing options.
- Eliminate providers that cannot present their proposals in terms you can immediately understand, whose products do not support your business case and whose process does not contain a clear beginning and end.
- Eliminate providers who fail to define an immediate and tangible ROI, one that can be substantiated with hard data.
5. Reality Check
- Remember that technology is a means to an end, not an end itself; don't fall in love with the sexiest and most advanced technology; less is sometimes more, cheaper is often better, and solutions that work within your existing business environment and IT constraints can often yield the greatest results.
- Know your culture, and that of the prospective partner, and make sure that their process and work style are truly collaborative.
- Look for a clean cultural fit founded upon integrity, respect and flexibility.
- Don't be penny wise and pound foolish; look for those that can deliver the greatest return, not the lowest price.
- Don't assume that premium pricing means premium service.
- Don't be fooled by big players; evaluate services and people, not brands.
- Be wary that you are not left a co-dependent to your consulting partner by insisting on a commitment and a concrete plan for knowledge transfer and ultimate self-sufficiency.
"There is a palpable frustration growing among IT buyers beset by a dizzying number of alternative solutions for sale externally and tremendous pressures to justify IT investments and show demonstrable results internally," Habig said. "We think these insights what to ask a consultant, from a consultant will help clients get more out of their consulting engagements and challenge the IT professional services industry with a higher level of accountability."