The High Price of Selecting the Wrong IT Partner

Cost of Choosing the Wrong IT Partner

Every big IT project is intimidating. Organizations outsource these to an IT partner because they don’t have (or necessarily need) in-house expertise in specialty areas such as user experience design, enterprise information systems, software development, legacy systems management, cloud computing, and/or anything big data!

You count on your IT partner to create added value for your organization. There’s an unspoken trust that your IT partner will protect your interests when you are admittedly not sufficiently knowledgeable to know what to ask for.

All too often, however, a complex IT project in the hands of an inexperienced or ill-qualified vendor (read lowest bidder) will swallow up budgets, spin wheels, and ultimately require a stop, reset, and restart. A typical chain of events might go something like this:

  • A customer is not sophisticated in the area of enterprise software development, but knows that it’s time for some sort of system overhaul, or upgrade, or fix, or something. They’ll let their new tech partner decide exactly what needs to be built, upgraded, or retired once they get started.
  • Customer awards major IT project to low bidding vendor.
  • The new vendor, with freshly signed contract, gets its young talent moving along with some creative though non-standard, complex design decisions. They’re not necessarily in scope, but they’re very impressive.
  • These early design decisions are made without consideration (or even awareness) of their long-term ramifications, such as additional maintenance costs, or technical debt incurred when the time comes for system evolution to newer platforms and technologies.

*WARNING: The vendor is now building an upgraded system that is costing as much as the original system development.

  •  Many months and cost overruns later + little to no evidence of benchmarked progress + unfettered scope creep = vendor fail.
  • To make matters worse, the customer has no requirements, no design documents, no list of issues to address and resolve, and not even a copy of the source code when it comes time to turn the project over to a new IT partner.
  • The customer engages a new IT partner, who puts all necessary pieces in place to get the system up and running and ready to run in production. The new partner brings experienced, capable management and technical staff, and operates transparently with the customer.
  • Customer’s original budget for major IT project has more than doubled – but the job is finally done! Project save.

Prevent an IT Partner and Project Fail

Get your house in order before you bid your project. Assess your readiness for a complicated IT project with a simple exercise: write out your major business goals on paper…with a pencil! Use this at your litmus test for moving forward. If you can’t clearly outline your goals in this most basic format, then you are not ready for the intricacies of a technology project.

Enroll your CFO or another C-level stakeholder (who doesn’t speak “tech”) into the vendor selection process. This will help ensure your vendor has appropriate strategic business experience and savvy, and can communicate at the highest level. Just as a surgeon explains to a patient, in plain English, what to expect as a result of surgery, an experienced IT partner will readily articulate  the business advantages you’ll gain at the completion of this project, e.g., revenue growth due to shorter sales cycle, streamlined operations, or improved client communication and data security.

Be sure a vendor is willing to become your partner, by listening to your challenges and proposing relevant solutions. Be alarmed if they have all the answers without asking any questions, and don’t put yourself at their mercy by allowing them to create a solution for a problem you haven’t identified.

Never make your decision based on cost alone. As illustrated in the real-life situation above, a substantially lower cost proposal often indicates a lack of experience and business expertise, and will likely end up costing much more in the long run. A reputable IT vendor will submit a realistic, comprehensive proposal that addresses your needs. Period.

How can you ensure that you’re choosing the right IT partner? Seek experience. Ask questions. Stay involved. Demand results.

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