Small and midsize businesses (SMBs) need to spend time to properly plan and state the roles and responsibilities of the systems integrator (SI) contracted to carry out their IT implementations. This will help avoid disappointments in terms of unmet expectations resulting in negative impact on business operations.
James Longwood, research vice president of IT outsourcing at Gartner, said SMBs typically turn to SIs when they lack the domain expertise or cannot afford to train their IT staff to be skilled for the IT deployment.
They also do so if they do not have good project managers or organizational change management skills internally, as SIs are able to provide industry best practices and advice, Longwood added.
The importance of the SI, thus, can be evaluated based on the capabilities available within the company as well as the complexity of the IT implementation, he noted.
Trent Mayberry, Asean managing director of technology growth platform at Accenture, said SMBs which attempt to tackle complex IT implementations on their own see an industry average failure rate of 30 to 40 percent when measured against at least one of the three aspects in schedule, budget, and work quality.
Many SMBs also have limited budgets and this constraint leads them to look only at small, local SIs as they cannot afford the bigger multinational companies (MNCs), Mayberry noted. This is starting to change though, as the advent of cloud computing services has made global SIs more accessible to smaller companies, he added.
"[SMBs] can now consume world-class solutions from these providers via 'pay-as-you-go' methods," he said. "This has shifted the economics and put such solutions within the reach of SMBs." He added this is particularly pertinent in Asia which has a high population of smaller companies.
Undertake proper planning, clearly define roles
However, Longwood advised SMBs against delegating everything to the SI and becoming a mere spectator during the entire implementation process.
Instead, it should have a good strategy to engage the right SI and monitoring system to ensure no issues emerge from the deployment, and it can be delivered on time, he said.
The first step would be evaluating SI candidates for the job.
The Gartner analyst suggested getting 2 or 3 SIs to bid for the project and requesting them to explain how they would conduct a typical deployment process. This way, companies have a clearer idea of what they can expect from the systems integrator and also understand how the vendor deals with challenges that may crop up, he explained.
SMBs should also produce a good contractual framework clearly outlining the scope of services the SI will undertake, including timescale and key deliverables, roles and responsibilities, and key assumptions, Longwood said. This will safeguard both its interests as well as the SI's should misunderstandings or challenges occur, he noted.
Having a good understanding of the migrations risks, from the existing IT environment to the proposed one, will also help companies better monitor the entire process, he said, adding all these measures should be followed as it would prevent drawn out, costly legal battles for both parties should things go awry.
"Legal recourse isn't pretty; usually the termination for cause clause is critical with penalties set at one to two times the contract value," he pointed out.
Longwood added such attention to details would stand the SI, particularly smaller ones, in good stead too.
Citing the example of Indian companies in general, he noted many of these businesses simply assume certain jobs will be done by the SI even though these were clearly not stated in the contract. This leaves the integrators no choice but to complete additional tasks within the same timeframe at no extra charge, he added
Mayberry agreed, noting that disputes between companies and SIs tend to occur due to a misalignment between goals and implementation. It is thus essential governance processes are in place long before a dispute arises, he stressed.
This governance process must be aligned to stakeholder expectations, benefits and standards accepted by the company, as well as through mutually agreed protocols and program charters. The SI would then be able to help the customer minimize such disputes while achieving the project's objectives, he elaborated.
"Our belief is that successful negotiation is consistently based on shared intentions as this helps companies navigate the complexity of changing business requirements, different stakeholders, and innovative solutions," Mayberry said.
"Ultimately, the success of all parties must be tied to common goals following which, negotiation becomes a question of 'how do we get there' rather than 'where are we going'."
Vincent Tay, director of management consulting at KPMG Singapore, agreed. He said the company would embark on any design and system blueprint for its customers based on their business needs, and not base it on technology requirements.
Mistakes from SIs tend to come up when costs start spiraling out of control due to aggressive tendering or unfamiliarity with the intended scope of work. The consultants would then cut corners in resources and scope of work in order to stay profitable. This is why KPMG employs a proven IT implementation methodology that provides the guidelines for a structured deployment, Tay added.