Banking In Disruption and the CIO Value Driven Response

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IT Vendor Management and Outsourcing 3 Key Points

In the expanding universe of information technology we continue to see the trend of outsourcing many parts of a company's IT infrastructure. This is generally pushed due to budget constraints or lack of expertise. With various IaaS (Infrastructure as a Service) models being pushed with cloud adoption, performing good vendor management is key to an organization's success. There are three lynch pins around which good vendor management is based:

  1. The Contract.

    This is generally called the MSA (Master Services Agreement) it will specify what services are provided, payment terms, warranties, IP ownership, conflict resolution, and termination. As part of the MSA there will be included a SLA (Service Level Agreement) this will define the guarantees around service such as availability, serviceability, and performance. This is normally tied to billing for credits surcharges, etc. If things go bad, it is this contract you will be relying on for restitution.

  2. The Relationship

    When working with IT vendors it is important to build a solid relationship with your account manager and the vendor as a whole. There will be problems along the way and having a trusted relationship with this person is critical to ensuring your needs met in a timely manner while keeping the relationship is a win for both sides. It also prevents the need to bring in the legal teams to fight over specific contract language. This is also where you must be clear on your expectations over and above what is stated in the contract for communication and responsiveness. Attend educational events provided by the vendor such as webinars or lunch and learns. Those will help you gain further insight about their product or service.

  3. The Project Manager

    It is absolutely critical that you have a PM (project manager) that is your employee or a contractor paid by your company attached to this relationship. The vendor will have a PM of their own, but they will be looking out for the interests and schedules of the vendor. Having your own PM on the vendor/project will allow you to better coordinate, schedule, and be apprised of the status of implementation and changes. The need for a PM is critical on the company side since there will be internal tasks that the vendor will need you to perform and having those tasks managed will keep things on-track.

Even though these items are straight-forward may companies fail to do 1 & 3 which invariably erodes the good relationship they may have with the vendor. Remember it is generally harder and more expensive in terms of management time by using an outsourced vendor, but if done correctly the cost savings and quality improvement are worth it.