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IT suppliers voting for Christmas?

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The smart choice: opportunity from uncertainty

Lab When did the two-year project lifecycle die? In my head, I put it at just over a decade ago, when I was involved in an accounting systems replacement exercise.

Everything was so clearly mapped out – from requirements capture, to design, selection, integration, testing in a variety of flavours, and all kinds of user education and change management. It all sounded fantastic – apart from the blindingly obvious fact that, by the time the project had finished, the requirements would have changed beyond recognition.

Reducing timescales are talked about as a good thing, and rightly so if it means people and companies get what they want more quickly. We talk about time-to-value, and the maths around earlier delivery is pretty compelling, particularly when compound interest is taken into account. These days, the perceived time span for a ‘good’ project plan appears to be about 3 months, with the real figure probably being somewhere between 4 and 6 months before an initial delivery.

Of course, there are “projects”, and then there are “Projects” with a capital P. Mobile applications can be cobbled together by sparkly-eyed media types in a matter of weeks. Large-scale consolidation and rationalisation activities can still take plenty of time, largely because it is risky to rush data migrations, system reconfigurations and so on. But even in these cases, the trend – and indeed the pressure – is to drive project timescales downwards, and/or break projects up into more manageable and achievable, and less capital-hungry chunks.

All well and good you might say. After all, who’d like a project to last six months when it should only take three? Let’s think about that… oh yes, my old business development manager Alan, whose “sales number” – and therefore whose performance-related salary – was dependent on exactly that.

Times might be changing but sales and procurement approaches still remain largely the same, however. Back in the old days, the overhead of selling a project, incorporating building the right client relationships, working with procurement people, repeated scoping, and so on, could be offset quite reasonably against the promise of two years’ income. These days, if the return is to be over three months rather than twenty-four, all that up-front effort becomes less than attractive.

This is a genuine problem, as we have found out in our discussions with companies on both sides of the supplier-customer divide. A couple of weeks ago I was talking to a senior guy at a large UK institution, who said they quite simply couldn’t find anybody that was interested in taking on certain projects. Systems integrators and consulting firms are seeing internal fissures appearing between new and old, and meanwhile, software vendors are facing the challenge of identifying partners that ‘get’ why it is worth their while to adopt the latest agile development tools or practices.

Without getting too philosophical, the answer would appear to lie in the difference between having a transactional relationship, and having more of an ongoing partnership. It is true that IT services suppliers can’t really see the point of a three-month contract, if that is all it is – the margins just aren’t there compared to bigger projects and programmes. If the deal is appreciated by both sides to be just one step towards what might be a productive ongoing relationship, then it becomes worth the up-front costs of sale.

This does require a bit of give and take on each side, however.

Organisations that see their suppliers as no more than subcontractors who should be kept in their place, are unlikely to appreciate the point of building longer-term relationships. Meanwhile, we know that ‘front-foot’ companies are more likely to source services externally, but equally, these will be more on top of their IT service portfolios.

In the conversation with the UK institution, supplier management came up as an important topic, but I was quickly steered away from the idea that it was all about procurement process and trying to pin down vendors based on best price, and towards how to work in collaboration with the business to ensure it took ownership of requirements and how they were articulated. From this perspective, perhaps IT decision makers become as much technically literate facilitators between suppliers and the business, as process or project managers.

It’s not absolutely clear where things will end up, if indeed they settle in one place at all. One thing is for sure – timescales are certainly shortening for certain types of project, and this is already having an impact on the IT supply chain. If it is true that organisations are finding it harder to find suppliers willing to work within shortened timescales, there would appear to be an opportunity for those who have understood how to make the model work. For the rest, it may be a case of attempting to drink from an increasingly crowded, yet diminishing pool of two-year projects which risk not delivering on their original requirements. ®

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