7 Tell-tale signs that it’s time to switch your IT Support Provider
A common practice in ICT Support Services is to outsource common ICT Support tasks to an external supplier, thereby transferring IT Support Costs to a hopefully lower fixed cost. An Outsourcing Agreement (“the Agreement”) is supported by a legal contract defining the scope and the extent of the services to be outsourced, the payment arrangements, remedial procedures and the usual legal boilerplate that goes with a contract.
The Agreement is different from a normal supply contract in that it defines a process of continuous delivery. It, therefore, lasts over a period of time, often years. The supplier becomes part of the furniture after a settling-in period. However, experience has shown that is often not a good thing.
So what can go wrong and what must the IT Guy keep a weather eye out for? On the face of it this is a win-win for both parties, but as usual, the devil lies in the detail and that is where most agreements will ultimately fail.
- Most important – Communications, verbal and formal.
Communications are the most important issue during the preparation of the agreement, its implementation and subsequent operation. Among the scope and extent, the contractual agreement must set out communications responsibilities during the operational phase clearly and unequivocally. This is particularly important in multi-cultural and multi-language environments. For example, in a global organisation IT Support London may provide remote IT Support Services to overseas locations.In an operational environment if the supplier is shirking his responsibilities or using miscommunications as an excuse, that is an indication that the relationship is failing.
- An increase in disputes.
The Agreement may initially have been correctly aligned to the business objectives and outcomes it was designed to drive. However, business objectives change and disputes will arise if the Agreement is no longer aligned with the new objectives. Equally, poor drafting or negotiation of changes at the outset or later can be a cause. Communications can also be an issue.
- Staff issues.
Four major issues here:
- A key to success of any outsourcing endeavour is support and commitment from the business. If staff in the business or supplier lessen commitment to the agreement, or do not support the changes to the business consequent to the implementation of the Agreement, the Agreement is in danger.
- Political agendas and personality conflicts between individuals or groups can give rise to disputes. It should not be necessary but either party may need to take action to resolve the cause of the conflict.
- Supplier key staff are suddenly removed or become unavailable. A change in supplier personnel can be expected from time to time, but with suitable notice. Sudden removal or unavailability is a key indicator that the supplier is taking the business for granted and has become complacent in the relationship.
- Close relationships between business and supplier staff can lead to inadvertent or explicit actions in favour of the supplier rather than the business by business staff.
- A slip in service levels.
One of the greatest dangers of a supplier becoming a part of the furniture is that of complacency. Service levels start to slip because no-one takes them seriously and no action will be taken anyway.
- Innovation slows.
A key part of a support profile is to identify where new technologies or a different use of current technologies will be of benefit to the business. Innovation slowing down is again an indicator of complacency and perhaps of the supplier providing second-tier staff to the business.
- Management Structure.
The management structure for application of SLA criteria and oversight of the agreement may need to be revised to keep up with business changes.
- Media and industrial speculation over the health of the supplier.
It pays to keep an eye on the overall business performance and health of the outsourcing supplier. For example, the share price of the major British outsourcer Mitie fell by more than a quarter in a matter of days after the recent Brexit vote. Whether this means that the outsourcer is about to fail, or it is a temporary reaction to market forces usually needs further urgent research. In any event, the IT Guy needs to seriously consider and plan what to do in the event of the outsourcer failing.