Can Vendor Management Cure IT Schizophrenia? Maybe.

Spend Matters welcomes another guest post from Jon Winsett of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom, and shipping.

In a recent post on the Harvard Business Reviews Blog Network, titled “Avoiding the Schizophrenic IT Organization,” the authors discuss two pressures tearing at the fiber of today’s IT departments. According to authors Marchand and Peppard:

“For CIOs, the good news is that they're now finding themselves at the center of business change with the opportunity to directly impact front-line business results. The bad news (if it is bad) is business managers' expectations of the CIO and the IT organization are soaring; they have a "no excuses" view of IT responsiveness.

This is giving rise to a schizophrenic IT organization. One side is focused on running global-infrastructure and implementing big-system-application programs over three to five years, where the emphasis is on compliance, security, reliability, and effective 24/7 operations. The other side is focused on "making IT happen" rapidly without the complex plans and multi-year rollouts that have been institutionalized in large IT organizations.”

At NPI, we have heard many CIOs and IT sourcing executives echo these concerns. While IT is at the heart of virtually every new business initiative, the task of simply keeping existing IT infrastructure up and running (and secure and compliant, etc.) has grown exponentially. It’s no wonder why today’s IT organizations feel schizophrenic.

To alleviate the pressures contributing to this metaphorical schizophrenia, changes in the way IT is managed must be made. This includes vetting and measuring vendors’ abilities to create agility and bandwidth within the enterprise.

IT and sourcing executives should ask the following questions as they vet vendors and measure performance:

  • How will the vendor enable increased IT responsiveness?
  • How scalable are the vendor’s offerings as business demands change?
  • Do the vendor’s contract terms and conditions inhibit flexibility (e.g. minimum purchase clauses, early termination fees) or promote it?
  • Is the vendor positioning the business to spend more over the contract term through “subtle” licensing constraints?
  • How does the vendor’s product roadmap support the enterprise’s short and long-term IT strategy?

The pace of business continues to accelerate and so do the pressures for IT to meet new and existing business demands. How well a company can prime the IT ecosystem – including vendors – to keep pace with change will play a crucial role.

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