Selecting the Right Service Provider for Your Company
Who has struggled to find the right doctor and or dentist? If you are like me, there are many factors that are considered and it is a tough decision. For example, how close is their office to your home or place of work, how old are they, where did they go to school, and do they accept your insurance plan? The questions one has are determined by what you believe is important and finding the answers are critical for you to make a decision.
In my previous blog “Do “IT” Yourself or Use a Service Provider”, I outline what to consider in order to decide if you should use a service provider or not. Once you have decided to use a service provider, it is very important to make the right choice. If you choose a service provider who doesn’t align with your companies values and priorities, the customer and service provider relationship will most likely be combative and will not meet your goals. This combative situation will negatively impact your entire organization. None of us want that to happen. In order to help you make the “right” choice for your company, I’ve provided several example values with supporting content for you to use in the decision making process.
Value #1 – Culture
Cultural alignment starts with an understanding of what your company’s culture is today and what you might want it to be in the future. Some companies are fast moving and resist processes that slow them down. Other companies are large, established entities that are comfortable with lots of processes and expect them. Also, some companies like to discuss projects and initiatives for long periods of time before making a decision. Service providers are in many ways the same in that each one has a different culture.
Value #2 – Scope of services
Each company’s IT organization has strengths and weaknesses. There are IT organizations who excel in provisioning and managing infrastructure and managing data centers. Also, within the infrastructure area, there are differences in server, virtualization, storage, backup, network and security delivery capabilities. There are other IT organizations that excel in developing applications. Determine where your strengths and weaknesses are and areas of need before evaluating service providers.
Value #3 – Financial value
The financial value is one of the most important values. The ultimate decision makers within your company will weigh the financial piece of a service provider proposal as heavily as or more heavily than any other decision criteria. Different industries usually have different financial expectations and what they are willing to pay. Comparatively, the banking and healthcare industries expect or are willing to pay a slightly higher price than the manufacturing and services industries. Also, some companies prefer CAPEX to OPEX or vice versa. Lastly, fixed or variable monthly fees and payment terms of net30, net60, and net90 intervals are important to consider.
Value #4 – Market vertical experience
Companies across different market verticals have different financial and operational targets. These different financial and operational targets directly influence the IT services that are required. For companies with heavy R&D like Big Pharma, their IT infrastructure must be able to scale up and down quickly and be very secure. For other markets like manufacturing, they can deploy IT infrastructure that delivers good performance, resiliency, and security but at a lower total cost. Overall, each market has specific IT infrastructure and service needs that must be met.
Value #5 – Delivery model
Some service providers prefer to deliver services remotely. Their service desk and engineers work at a central location and use tools over communications links to manage IT infrastructure. Other service providers will use a combination of remote and local teams. In some cases, existing client tools will be used in conjunction with the service provider’s tools. Also, account management can be shared or dedicated depending on the service provider. The IT scope, quantity and locations of your offices, and size in dollars and time of the deal will usually influence the delivery model.
Value #6 – Flexibility
The flexibility of different service providers varies significantly. While one service provider will accommodate changes to their standard service during contract negotiations and then adjust their service during delivery in order to meet a specific customer need, there will be other service providers who will stick to their standards at the beginning, in the middle, and at the end of an agreement. You should try and determine what level of flexibility you require. For example, if you prefer to keep many of your existing processes and expect business conditions and IT to change in the middle of the contract, you should choose a more flexible service provider.
Going back to the analogy of “selecting a doctor or dentist”, once a bad selection has been made then the breakup process starts and the search begins again. Like you, I don’t have the time nor do I want to go through the selection process again so making the right decision is very important. The values listed above are extremely important to consider while you are evaluating and selecting a service provider. Many of the values will affect the others. For example, if you want a service provider who values flexibility and a dedicated delivery model then you should expect to pay that service provider higher monthly fees. When more and more of the values are aligned between your company and the service provider, the chances a successful partnership increase significantly.