We’ve seen it done well, and we’ve seen it done very badly. Phil Barton, Chief Customer Officer at First Focus, has 20+ years of experience in IT procurement, and he is going to help you save time and money for your business by learning from the mistakes he’s seen. This week he joins Brendan, taking a vendor agnostic approach to talk about how businesses with 50-200 staff should go to market when sourcing IT services. Phil talks structure, what to/not to ask, and how to get maximum value.
The guys will go past a simple ChatGPT list of RFP inclusions and talk more to gotchas and how different IT companies come at these sorts of responses. They also cover off how different approaches will see some MSPs drop out and others become more interested.
Episode Highlights:
In today’s digital era, sourcing IT services effectively is critical for businesses to stay competitive and operationally efficient. Whether you’re an IT manager, CTO, or a business owner, understanding the intricacies of going to market for IT services can save your organisation time, money, and resources. In this blog post, we will delve into strategic insights from industry experts on best practices for sourcing IT services, ensuring you make informed decisions that align with your business objectives.
When it comes to sourcing IT services, traditional sales methodologies often emphasise focusing on pain points—what’s not working well with your current provider. However, it’s equally important to identify what is working well. This dual approach not only highlights areas for improvement but also ensures that valuable aspects are retained. Remember, if something seems too good to be true, it probably is. Start your process with a clear understanding of your technical requirements and be open to exploring various options.
Sourcing IT services might not sound exciting, but it’s crucial. A chaotic approach to going to market can lead to wasted effort and resources. It’s important to start with clarity on what you want to achieve. As Phil Barton, Chief Customer Officer, emphasises, “Without a clear goal, the process can be costly and directionless.” Identifying who owns the decision within your organisation and ensuring that the right people are involved early in the process can mitigate the risk of last-minute changes or rejections from higher-ups.
Understanding who owns the decision in the buying process is pivotal. It’s not just about whether the IT manager, CTO, or CFO makes the call, but ensuring that the designated person has the authority to follow through. Early involvement of all relevant stakeholders, clear communication, and understanding their motivations can prevent the scenario where recommendations are cast aside at the last moment.
The first step in going to market for IT services is establishing clarity. Different organisations have varied reasons for seeking new IT services—be it cost reduction, process efficiency, or enhanced security capabilities. Begin by clearly defining who needs to be involved, why you are going to market, and what outcomes you expect. Lack of clarity in any of these areas can lead to missteps and suboptimal outcomes.
One of the key questions in the procurement process is when to discuss pricing. According to Barton, having a clear idea of your requirements and discussing budget early on can save time and effort. “If you’ve got a clear idea of your requirements, our preference is to discuss budgetary numbers early. This helps avoid guesswork and ensures that both parties are on the same page from the start.”
A successful sourcing process begins with a clear articulation of your objectives. While detailed technical documents are helpful, they should also outline the business problems you’re trying to solve. Barton points out that sometimes, a concise document that clearly states the desired outcomes is more effective than an extensive technical report. This helps potential providers understand your needs better and propose relevant solutions.
Articulating your current state and future state needs is crucial. Providing a clear picture of your existing IT environment and your desired outcomes helps potential providers tailor their solutions to your specific needs. This could involve technical audits, detailed reports from exiting IT managers, or succinct documents outlining key requirements and desired changes.
For organisations with in-house IT managers, it’s essential to clarify which roles and responsibilities will be retained and which will be outsourced. This clarity helps in choosing the right service providers who can complement your internal capabilities. For those without in-house IT managers, it’s vital to understand your high-level requirements and communicate them effectively to potential providers.
The decision to go through a formal Request for Proposal (RFP) process versus a more informal selection process depends on your specific needs and constraints. While RFPs can ensure compliance and thorough vetting, they can also limit creative solutions by being overly prescriptive. Barton suggests that a more collaborative approach, where you can workshop ideas with potential providers, often yields better results.
One often overlooked aspect of sourcing IT services is the cultural fit between your organisation and the service provider. Barton recounts an experience where values alignment played a crucial role in the decision-making process. “Ultimately, people buy from people. Finding a provider whose values align with yours can lead to a more harmonious and productive relationship.”
When comparing proposals from different providers, it’s essential to ensure you’re comparing apples to apples. Barton advises focusing on the structure of the proposals and understanding what is included in the pricing. Ask for detailed explanations of cost components and seek testimonials or case studies from similar clients to gauge the provider’s performance and reliability.
To avoid unexpected outcomes, be clear about your objectives and communicate them effectively with potential providers. If budget constraints are a primary concern, discuss them openly from the start. This transparency can save time and prevent misunderstandings later in the process. Additionally, consider engaging providers in small, focused projects to evaluate their capabilities before committing to a long-term relationship.
Deciding whether to hire in-house IT staff or outsource depends on your specific needs and resources. In-house staff can offer specialised knowledge and dedicated support but may require significant investment in training and development. Outsourcing, on the other hand, provides access to a broader range of expertise and can be more cost-effective. Evaluate your long-term IT needs, budget, and the complexity of your IT environment to make an informed decision.
Certain red flags can indicate potential issues in the procurement process. Barton highlights the importance of having access to decision-makers and avoiding excessive filtering of expert opinions. If you find that you’re not able to have direct conversations with key stakeholders or if the process feels overly bureaucratic, it may be a sign that the procurement process is not aligned with your needs.
Sourcing IT services is a complex but crucial task that requires strategic planning and clear communication. By focusing on clarity, involving the right stakeholders, and being transparent about your objectives and budget, you can navigate the process more effectively. Remember to consider cultural fit and values alignment, compare proposals thoroughly, and be open to collaborative approaches. Whether you choose to hire in-house or outsource, making informed decisions will help you achieve better tech and higher returns for your business.
In conclusion, the insights shared by Phil Barton and other industry experts provide a comprehensive guide to sourcing IT services. By following these best practices, you can ensure a smoother, more efficient process that aligns with your business goals and sets you up for success.
This blog post draws on the experiences and advice shared in the podcast episode “Better Tech, Higher Returns: Your Strategic Guide to Sourcing IT Services.” For more insights, listen to the full episode and stay tuned for future discussions on optimising your IT strategies.
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