Choosing an IT Cloud Services Provider - Internal Or External
Choosing an IT Cloud Services Provider - Internal Or External
Like the old adage, "deeds speak louder than words", whether it's an internal or external provider, it's up to you to see through the marketing, sales, good intentions and other less-well-intended smoke to focus on their deeds -- their behaviors.
Of course, tangible savings are a large part of your decision. Most executives look for at least a 20% reduction in overall related expenses per annum. I have personally led selling services projects which delivered as much as 30% and upwards of 55% savings in expenses during the first year alone -- while also delivering significant service level advantages. I'd say that huge competitive advantages were delivered. My clients were able to re-mix internal resources to focus on core competencies that drove greater client-visible differentiations. Also, clients avoided adding resources and/or saved their existing high-contributor resources from leaving or cracking under the huge pressure being endured as incremental pressures had built-up over time. By the way, high levels of overtime and/or increasing frequencies and magnitude of service level impacts are key indicators of burn-out conditions, and these are important quantitative costs to consider as well.
However, what about the 'intangible' parts of your decision? There are vital clues about the relationship cost you may experience with your internal or external service provider. These are important aspects to consider - certainly pertaining to risk mitigation and which may sooner or later significantly impact tangible results. This is especially important when the quantitative aspects of different service providers' proposals match up in a similar manner.
What follows is a brief sketch of intangible qualities - the key behaviors -- to consider and compare.
The key objective - assess your prospective providers. Are they trustworthy for delivering game-changing advantages for today, tomorrow and beyond? Key indicators are described below.
A continuous commitment to excellence -- including integrity, best value, flexibility and responsiveness / proactivity. What is the provider's corporate conscience? Several key behaviors to observe are:
o Do their deeds consistently match their words?
o Do they demonstrate a consultative approach?
o Do they offer proof points of proactive industry leadership?
Thought Leadership. Does the provider demonstrate that they grasp the direction of business and technology? In the cloud computing era, if they are not focused on the future, how will they continue to be at least competitive and at best industry-leading in the coming months and years as dynamic changes occur? Several key behaviors to observe are:
o Solid understanding of current and emerging concepts.
o Do they have cross-silo (hardware, software, communications, services, etc) connections with industry leaders?
o Connection with industry changes. What are their perspectives?
Practical Leadership. Even more important than thought leadership, how well does the provider execute? Do they deliver practical excellence in savings and service levels - today? Are they proactive, or only respond when challenged? Several key behaviors to observe are:
o Multiple IT vendors are supported (hardware, software, communications, services)
o Breadth of services and depth of functional know-how that they deliver.
o Security and aligned segregation of duties and/or information.
o Current clients in the same disciplines you are considering. Or, in cases of new offerings, what is their track record for other clients? Ideally, client referrals. Ideally, from well-recognized, notable clients.
o Industry recognition for performance and/or support.
o Quick and disciplined processes that incorporate quality assurance.
Quickness and ease of doing business. An important sub-set of practical leadership is how quick and easy is it to do business with the provider and/or for the provider to adapt to changing needs and/or competition. Several key behaviors to observe are:
o Flexible scope options: support frequency, who runs the infrastructure, where does the infrastructure reside. o Flexible support options (worldwide, country, region, local)
o Flexible Quality of Services that align with your user groups' requirements.
o Flexible menus and charges.
o Consistent governance and billing / charge-backs.
o Attentiveness that you will receive. What percentage of the provider's business would this project represent? o Transitions - Time and Costs - during both start-up and wind-down phases.
Key Personnel. If the provider's key people are not strong in exhibiting good behaviors, then how will their team continue to stay the course in delivering a competitive edge? Assess the following people:
o Leadership Management
o Solution champion ('seller')
o Architect / Solution Designer
o Account Executive / Delivery Executive
o Consultants and Delivery Specialists
o Project Manager
There are many behaviors to observe. Those that are described above are only a short list. In general, any warning signs that pop up of course merits additional exploration. On the other hand, providers who demonstrate good behaviors in all these areas deserve additional consideration. As a top executive, you will have to apply thoughtful judgment for weighting the quantitative and qualitative characteristics in a manner that best suits your organization's goals.
It's time for you to take action
In the cloud computing era, you must evaluate how to optimize and best align your organization to differentiate its offerings to clients while taking the best advantage of leveraging internal and external service providers' scale and expertise. To be most successful, you need to consider more than quantitative savings - as vital as these are. You need to also consider how your organization's providers' will perform over time.
The most successful internal and/or external service providers for today and tomorrow will likely be those who demonstrate key qualitative behaviors. The behaviors that should resonate through their leaders, key personnel and throughout their whole team include: commitment to excellence, thought leadership, practical leadership, and ease of doing business. These behaviors are described more fully in the above brief. As the executive champion for your organization, observing these behaviors will give you a vital edge in thoughtfully comparing service provider alternatives and in facilitating the best decisions.
About The Author:
Lance Gattoni invites enterprising executives who are interested in his services to send an email to: lance.gattoni@gmail.com
His services include consulting engagements and/or where the alignment is strong he is currently available for fulfilling a key career position on your team. Either way, by adding him to complement your team, you will be the sponsor for quickly driving collaborative innovations and achievements that make a difference.
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