Lars R. Andersen
Freelance CIO/CTO • Management consultant • Project manager • IT architect
Please note that the information here contains my personal viewpoints and not those of any present or previous employer
IT procurement and contracts
Securing an adequate IT contract can come a long way from following a few principles:
The following illustrates how the sourcing process may be set up in general.
The steps are as follows.
Strategy/direction. As a first step, the overall direction of what needs to be procured must be in place. This will be driving the decision for a replacement of system, sourcing of operation or what the specific sourcing project is about. In addition, the expected effort, approach, timeline, staffing etc. must be in place.
Vendor options. Also as part of the part of the first phase, there must be a gross list of vendors that are expected to fulfil the functional, technical and commercial requirements.
These first two steps, particularly the direction (strategy) are significant undertakings in their own right.
The next steps consist of preparing the material that is to be sent to potential vendors and submitting it to the vendors.
Prepare requirements lists the functional and technical requirements. The details of this depend on what the object of procurement is and how much one desires to specify.
Prepare RFQ material, i.e. the more formal documents. Some of this is generic and some dependent upon the specific object of procurement.
Submit tender and short-list consists of sending the material to selected vendors and, based on the answers, select the most suitable for further discussions.
Following getting the responses from the vendor, a phase of comparing and normalizing responses follows. This can be quite formal with minimal dialogue in case one chooses to stick strictly to the requirements. However, as much more value can be gained by leveraging the strengths of the vendor rather than insisting on one’s own requirements, a dialogue is generally better than very formal interaction.
For each vendor, understanding the strengths of the solution proposed, and going into detail to understand how the vendor may support your requirements.
After the iterations with the vendors, a selection based on as normalized comparison as possible must be made. This can be either a final contract or a memorandum of understanding, depending on the level of finalization. In order to ensure consistency towards the vendors, the selection should be final.
Following the selection, there is an implementation process. The process will be designed as part of the sourcing process, but is obviously very depending upon what is being procured.
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