Over the course of my career in IT, I’ve been part of roughly a dozen large projects involving negotiations with the likes of SAP, Accenture, Microsoft, Oracle and many more. And while I’ve gotten better at anticipating issues & risks (and how to mitigate them) with each initiative, each one had a unique set of assumptions and/or objectives that made it something of a “first time” experience nonetheless. Because just like any other complex, non-trivial undertaking, there are three crucial types of information that will impact the quality and predictability of the outcome:
1. The things you actually know
2. The things you think you know…but really don’t
3. The things you don’t know…and are oblivious to
Knowledge, as the saying goes, is power, and while due diligence plays an essential part in turning misinformation (#2’s) into actual knowledge (#1’s) it does almost nothing to address the #3’s. Understanding “the things you wish you would have known” only comes with experience and by then it’s usually too late. The result? You inevitably get blindsided in the midst of the project by things you never saw coming or get derailed by erroneous assumptions that end up having disastrous consequences. And while it makes for a great slide on “Lessons Learned” in the project post-mortem, it’s typically not so good for the project morale/schedule / ROI along the way.
The root of the problem is that your company is in business to deliver an actual product – not to negotiate and implement IT projects – so you are automatically at a disadvantage with IT vendors who negotiate and implement dozens if not hundreds of projects every year. This enables them to come up the learning curve much more quickly than the companies that buy their software & services, and consequently, they have become experts at minimizing their exposure to risk while maximizing their revenues in the process. Note that I didn’t say eliminate risk, because that is an impossibility, but rather minimize the impact of the unexpected/unplanned things that are going to happen over the course of any large project. Indeed, during my 25 years working on IT projects, I have seen first-hand how bias, misinformation, and ignorance of critical information (the #2’s and #3’s) inevitably result in project overruns and even failures. Alternatively, since joining UpperEdge earlier this year, I have also seen first-hand the value and peace-of-mind that an experienced, independent perspective can bring to the project, whether it’s during the planning stages or once the project is already in-flight.
Here are just a few examples of how UpperEdge can help you avoid blind-spots and costly assumptions:
- You’ve selected Deloitte as the System Integrator for your SAP initiative and are finalizing the Statement of Work for phase 1 of the project. What safeguards and/or incentives should you include in the SOW now to ensure that your company doesn’t assume all of the financial risk later?
- You’ve received proposals from Accenture and TCS in response to your RFP for global AMS services. The proposals appear to be equivalent in terms of scope, SLAs, and even costs, but TCS’s staffing plan calls for 15% higher staffing levels. So has TCS included a productivity hedge in their plan and passed the costs along to you? Or has Accenture been overly aggressive in order to present a competitive bid? To put it more generally, what level of productivity should be used to evaluate both proposals fairly?
- Your SAP project is falling behind schedule, and the change orders are flying fast and furious. Your SI is more than willing to accommodate the requests, to the tune of $3M, and even though you are already close to being over budget you feel like your hands are tied. What kind of strategies will be effective in keeping the costs down? What can (should) you ask your SI to do as a partner in your shared success?
Whether you are negotiating ERP , HCM, CRM, PLM, SCM software licensing deals, comparing proposals from multiple System Integrators, or trying to course-correct an errant project, having an experienced, trusted advisor in your corner helps to level the playing field in the same way that the Internet has transformed car buying. Conversely, trying to navigate these endeavors yourself would be like walking into a dealership to buy a car without first taking advantage of the wealth of the information that is available today: you’ll probably end up buying more than you need, you’ll probably pay a premium for it, and you’ll have very little recourse if there are problems down the road.
It goes without saying that there is no silver bullet when it comes to eliminating risks, but with some timely advice from the right advisor, you can position yourself for success and be more confident in your ability to recover from the inevitable surprises. If you would like more information about how UpperEdge can help you with your IT sourcing, negotiation, or project governance initiatives, please do not hesitate to contact me at [email protected].
- 5 Mistakes to Avoid When Developing a SOW With Accenture, Deloitte, and IBM
- Taking Care of Business: Your Business Case Isn’t Shelfware
- Applying Fixed Fee Constructs on Transformation Initiatives: 4 Key Items to Negotiate
- Let’s Face It – Risk Happens: Pay a Little Now, or a Lot Later