Firms Get More Strategic About SaaS Sourcing in 2010

Liz Herbert

Sourcing executives are setting their strategic direction for 2010 and beyond and increasingly asking: “What role should we play in SaaS buying decisions?”

Many sourcing executives see SaaS coming into their firms under the radar screen, through divisional, try-and-buy style purchases, often low-cost enough to go largely undetected – at least in their initial phases. However, they also see SaaS’ growing importance as a key strategic initiative in their firms and the trend towards SaaS becoming ubiquitous in the larger software market. Therefore, they want to better understand existing SaaS solutions that are being used in their firms today – where, when, why – and also understand when it makes sense to proactively push SaaS as the best overall solution based on factors such as TCO, flexibility, usability, IT staffing considerations, and upgrades.

Key considerations for sourcing SaaS include:

Read more

Previous IT Project Failures Do Not Matter When Choosing An IT Service Provider

Tim Sheedy

by Tim Sheedy
A factor that tends to be considered when choosing an IT service provider is how many project failures they have had – particularly when some of those failures are large, costly, and well-publicized. And if that is not a formal consideration, project failures are often on the mind of sourcing organizations. In fact many companies that I have spoken with over the past 12 months have actively excluded some players from their short list due to their previous failures. These types of metrics tend to work against the large players as they have more contracts and therefore, if they run at an industry average failure rate, they are most likely to have more failures. IBM, as the company that probably does the most IT projects, has the most failures (assuming that their failure rate is the same as that of their competitors) – and this works against them. I have actually heard people say that they would never have IBM in as an IT services partner because of the fact that so many of their projects fail. And this does not only refer to IBM – you could switch in any large IT services vendor’s name here as the sheer number of projects they work on means that they are likely to have more problems too (as very few IT projects go smoothly). If the failure rate is 1 in 10 (and this is just a guess) then a vendor that has undertaken 1,000 projects will have more failures than one who has undertaken 10…

In my humble opinion, focusing on failures or project problems is a short-sighted view. Project failure is rarely the fault of your IT services partner – even if it is, it is your fault for not managing the process effectively and pulling them up before it turns into a failure. The only time when the partner is to blame is when they promise to do something that simply is not possible – and again, they are probably just responding to your impossible requests.

Read more