ICT buyers get upper hand

commentary Information and communications technology (ICT) vendors confront a raft of new trends and developments next year that reinforce a stark reality. You can no longer pull the wool over the eyes of ICT purchasers.

commentary Information and communications technology (ICT) vendors confront a raft of new trends and developments next year that reinforce a stark reality.
Iain Ferguson, News Editor, ZDNet Australia

You can no longer pull the wool over the eyes of ICT purchasers.

After several years of horror stories about enterprise resource planning implementations scrapped at a cost of millions of dollars, naively negotiated outsourcing arrangements that make Sydney's Cross City Tunnel look like a well-planned deal and chief executive officers publicly lambasting the ICT industry's inability to deliver, maturity on the customer side appears to be reaching a point whereby the old tricks thankfully do not work.

Your writer can never forget the many times when -- confronted with complaints that they had negotiated a contract with a customer whereby excluded "extras" were only undertaken at an exorbitant price -- spokespeople for large outsourcing companies would smoothly trot out the line that problems had only arisen because the customer had not properly scoped what they wanted in the first place.

One can only speculate as to the extent to which behaviour like this has prompted the trends towards "multi-sourcing" and the drawing of previously outsourced functions back in-house as organisations look to regain control of their ICT.

Also next year, initiatives from the federal and NSW governments to level the playing field between open source software and proprietary software companies are -- at the very least -- likely to keep the latter honest. With the release of the federal open source procurement guide earlier this year and the at least partial constitution of the panel of preferred Linux suppliers for NSW government departments by the end of the year, the groundwork has been laid for greater choice -- and tougher competition.

Suppliers will also continue to find themselves under immense pressure as ICT shops at blue-chip organisations continue to whittle their partners down to a few key companies. The nation's largest ICT shop -- Telstra -- announced plans to sharply reduce the number of vendors with a presence in the carrier as part of a massive restructuring effort. Announcing the suppliers who had won deals for IP and 3G network deployments that ranged into the billions of dollars, chief operations officer Greg Winn, said others were "obviously … fighting for the right to be Telstra's preferred suppliers" for other big contracts. Others to complete rationalisation programs recently include the national airline, Qantas. With this trend apparently set to continue, there are going to be a lot of bloodied noses in the vendor arena.

A final factor is the hard-won and often bitter experience of those responsible for ICT procurement. Suppliers are coming up against ICT purchasers much less inclined to accept their rhetoric at face value and who demand performance and accountability. Your writer suspects the hype surrounding the business possibilities of Web 2.0 -- being avidly pushed by at least one high-profile analyst organisation -- is being met with cold-eyed suspicion rather than the wide-eyed enthusiasm that greeted the dot com boom.

What do you think? Is your ICT procurement based on much sounder principles now than one, two or three years ago? Do vendors and outsourcers 'get it' in their dealings with customers nowadays? E-mail us at edit@zdnet.com.au and give us your thoughts.

Iain Ferguson is the News Editor of ZDNet Australia.

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