Maximising service providers

Recently I heard words I never thought would come from the mouth of a telco executive: "We like to provide bandwidth when we can, but we're a managed services provider."

Finally, a faint sign that telcos might be getting the message that it's not about bandwidth, it's about services.

So here's a question: if telcos start positioning themselves as service providers, what does that mean for IT executives? First, they need to revamp their organisations to better manage their providers. My recommendations:

- Institute effective best practices for service selection and provider procurement. Specifically, institute a formal procurement process.

Start by defining the business needs then moving on to technical requirements. So, don't assume the requirement is for frame relay if the business need is really high-speed connectivity to branches.

Once you've set your requirements, define selection criteria for the services. Then take a weighted-scorecard approach to evaluating RFPs, with each selection criterion assigned the appropriate weight based on your company's goals and needs.

- Build and train an effective negotiations team. Most carrier negotiations are handled by the procurement unit, with help from the legal team, with the basic goal of getting the best price. But for services in which terms and conditions might matter more than the price, the negotiations team needs enhancing.

An effective service provider negotiation team should include a technical representative from IT and representation from the business (which has the best insight on what services are and aren't required). Of course, the procurement people are still key - they're the ones who'll succeed in closing the best terms and conditions.

- Establish a vendor management team. Managing suppliers requires a mix of human and project management skills to ensure the right services are delivered on time. Many IT shops lack both types of expertise - so they'll need to recruit talent (either from within or outside the company).

- Appoint internal customer liaisons. These individuals are chartered with ensuring that the services that have been negotiated and delivered meet the needs of the business. This means working closely with business units to understand those needs and then communicating them back to IT - which is the role of a customer liaison.

- Finally, establish cost and performance benchmarks upfront, and revisit them regularly.

Johnson is president of IT research firm Nemertes Research

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