A Meta Group presentation in Johannesburg yesterday highlighted the need for companies considering outsourcing to discriminate between a sales pitch and good advice from IT vendors.
Dean Davidson, Meta`s VP and director of outsourcing and service provider strategies, mentioned the terminology often bandied about by IT vendors, including terms like "strategic technology partner", "increase competitive advantage" or "making IT a competitive weapon".
"Be sceptical," Davidson warned. "When the vendor throws out some phrase that means nothing, the first thing you ask is 'how do you measure this?`"
Meta Group believes outsourcing has become a buyer`s market. "Top-tier outsourcing is becoming an unforgiving marketplace," said Davidson. "This is creating lots of choice for clients."
Defining the criteria
Davidson pointed out that while this range of choice caters for just about any technical need, the Meta Group is now seeing a shift towards what he terms "softer" criteria in the IT vendor selection process. "It`s not about who is better technically, but now rather about sifting vendors down based on ability to fit in with corporate culture," he said.
The Meta study showed that by 2007, more than 80% of IT organisations will use outsourcing services from multiple vendors. In light of this, Davidson stressed that it is important for companies to establish a standard set of criteria for IT vendor selection.
"The reality of the world is that you cannot manage strategic relationships with more than three to five vendors," said Davidson. "Companies have to assess whether it would make more sense to develop abilities in-house or to expand relationships with current vendors. Outsourcing costs money; you have to invest in managing relationships."
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