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Signing a new IT deal - the calm before the plunge

Tom Paye | Aug. 21, 2013
Now, more than ever, it's advisable to test the waters before diving straight into a big contract.

For any IT pro, signing a new contract can be a daunting task. With line-of-business managers increasingly keeping a watchful eye over the IT department, IT managers need to be extra-careful about how they spend their budgets — and who they spend it with. Now, more than ever, it's advisable to test the waters before diving straight into a big contract.

"In selecting a partnership, the IT manager is effectively pinning his or her organisation's business interests on the success or failure of the partner's experience and its ability to execute. This could, therefore, have serious ramifications on the IT manager's own reputation and, more importantly, on the success or failure of the IT initiative in the organisation."

That's the view of Sayed Golkar, Director, GBM Business Solutions, when it comes to signing up to a new IT contract. Of course, any IT manager knows that, if a contact goes sour, and a supplier fails to deliver, it could be their head that rolls. What's more, even more responsibility is placed on the IT manager's head if the dodgy service provided actually affects customers.

The technological world is littered with the tattered reputations of CIOs who failed to deliver projects on time — and to budget —simply by signing up with the wrong suppliers. For example, in a recent, high-profile screw-up, the BBC's Chief Technology Officer, John Hall, was suspended in May after it came to light that the British broadcaster had wasted almost £100 million on a digital production system and archive. The failed project was blamed on a poor choice of suppliers.

That's an extreme example, but it does show what's at stake when IT managers have to sign contracts for new projects. That's why, increasingly, IT pros are looking to test the waters with new suppliers. According to Golkar, there are a number of key concerns that need to be addressed before any concrete agreement is made.

"On the supplier side, [you need] local/regional experience, [a] proven ability to execute, commitment to the region, [the] ability to understand the business requirements and thus provide effective solutions to meet them, [and] the ability to provide effective support, post-implementation. These are all valid concerns. Some or all of these may make the difference between a successful or failed partnership," he says.

Increasingly, IT pros are turning to systems integrators for smaller "test" projects before signing up for the big ones. These projects are typically less critical to the business  but still helpful — and they give the customer an idea of how the supplier can cope with the demands of the business.

That's not to say that big IT projects are still being implemented without completing a test project first. After all, for large-scale contracts, everyone knows that a tender is put out, and whoever brings the best deal to the table is chosen to implement. If there's no scope for doing a test project first, due-diligence must be done to ensure that the project won't go south.


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