Feature: It’s all about Trust

Corporate IT relies heavily on partners, but finding the right one can be hard

From generalist to specialist, and often claiming to be a bit of both, New Zealand is blessed by a diverse range of systems integrators, consultancies and the service providers, able to supply skills user organisations need to deliver effective and timely IT services.

These parties are available for one-off projects like an implementation, while others may be around for multi-year multi-million dollar contracts. So how should you judge and select them?

Some parties, such as Deloitte, are part of the more generalist business consultancies, others like Axon, EDS and Gen-i are broad IT specialists, while smaller IT firms, such as Voco, specialise in key market niches. And we mustn’t forget IBM and HP, able to supply the services as well as the hardware and software.

Deloitte sells itself as New Zealand’s “only fully integrated business consultancy — combining strategy and operations, business technology services and human capital management.”

Wellington-based consulting partner Dave Farrelly says “people buy people, not brands,” which means listening to customers and being able to articulate their needs. It means building a trust and rapport, with Deloitte promising a broad perspective, accepting that CIOs are not just business leaders but technology leaders too.

“We believe that trusted partners must not only be able to deliver systems, but must also be agents of change. They need to bring a broad set of skills to enable IT to deliver real value to the business,” Farrelly says, adding customers are keen to see references and proven methodologies.

EDS, which was recently taken over by HP, agrees, with New Zealand Country Manager Alfonso Gomez saying people buy from “people they like and trust”. Gomez says EDS can develop deep and lasting relationships based on its extensive knowledge of customer businesses as well as its delivery.

Michael Foley, a co-founder of Voco says it is “hard results” that he sells his business on.

His clients look for “demonstrable experience and results”, saying this track record helps “mitigate the risk” around the projects they are to undertake.

IBM global business services managing partner Graham Kittle says customers seek credibility from partners, and a good reputation in the marketplace.

“It’s about relevance, focus and track record,” adds Axon director Scott Green. This also includes selling the partner specifically to the organisation, either as a generalist or specialist.

Axon has some large customers, such as Air New Zealand, where it looks after “silos” of functions, while for smaller customers like Workbridge and the Animal Health Board, it will handle everything. Smaller organisations, continues Green, find it more efficient to have one firm doing everything.

IBM also claims generalist and specialist skills, with Kittle noting Big Blue has specialist departments to deal with industry sectors such as the public sector, finance, or functions such as marketing.

EDS also claims similar adaptability through a “local global” capability allowing tailormade, niche offerings, while Voco stresses its flexible “company without walls” (no fixed premises) philosophy as allowing it to offer “best-fit’ teams for individual projects.

“Consultancies like Voco are best deployed as an extension, accelerator, if you like, to an organisation’s capability to drive [and] achieve a result in a specific contecxt. We have a saying that our modus operandi is to ‘get in, get a result and get out’. The irony being that in doing so we tend to get invited back time after time to address further result areas,” Foley says.

With partners selected on mutual co-operation and responsibility, cultural fit, honesty — including saying no when necessary — and passion, Deloitte says contracts should focus on outcomes, particularly successful measurable outcomes.

“Contracts must be clear on what all parties mutually expect of one another and what the consequences are if any party, customer or supplier, fails to meet their obligations,” Farrelly says.

This means all parties taking a healthy reality check before writing any contract. There must also be something for both sides since if either side feels ‘stitched up’ the level of support provided will be reduced.

“Contracts are at their most valuable when both sides are utterly committed to them, and for that to apply, both sides must have something to gain,” he says.

Voco’s Foley confirms a need for clear terms of reference, aligning the client and consultant’s understanding of background, objectives, scope, approach, deliverables, costs, schedules and resourcing.

“If you define the target well, everyone is clear when it gets hit,” Foley says.

IBM sees successful contracts as sharing a balance of risk, but Kittle says performance indicators must be more than just SLAs and KPIs, but giving the supplier the confidence to operate, which also means sound and honest communication between both parties.

Axon’s Green says SLAs aren’t always tied to outcome. What works best is also when the customer seeks to help the vendor by doing some things for itself, and interacting with the supplier in the most cost-effective way.

“Rewards and recognition for changes in behaviour drive a more profitable contract for a service provider,” Green says. Contracts paying the consultants by the hour can also lead to high cost without accountability.

Regular dialogue and reviews will keep the relationship happy, he continues, but contracts must also feature flexibility to meet changing business requirements.

“If there’s a fundamental cost shift or technology dynamic that impacts on the service provider, there should be an opportunity to reflect that in the contract,” Green says.

Gomez at EDS agrees a longer term view is beneficial.

“Just like a marriage, we sometimes find ourselves disconnected from or neglecting our partner. Relationships need to be worked at. Re-injecting fresh thinking, innovation and enthusiasm is essential to maintaining a long-term relationship. Trust, transparency, honesty and discussing the good and the bad: All these go a long way in helping a healthy relationship,” he explains.

Deloitte sees a marital aspect too, but adds it seeks feedback from customers so it can embrace change and improve itself.

“Keep it [communication] open and transparent. A pragmatic level of structure in the engagement helps this,” continues Farrelly.

Early candid communications are fundamental, calling out on any issues early in the piece, adds IBM’s Kittle.

Kittle says pointing out what else the supplier can do also maintains relationships.

One example is IBM having a specialist marketing product called Cobra that seems to be working well with customers. And once trust is gained in one area, it leads to trust in others.

Deloitte says it is often engaged to implement a change or system, but that has not addressed the customer’s real problem. The supplier may also have to re-examine the project, which can blow the budget and test the relationship. It may even fail to fix the problem.

Trust is essential to ensure the partner does the right thing to ensure and not just exploit your issues for their gain.

Farrelly also calls on organisations not to pick the suppliers they like for every project just because they delivered last time. Sometimes specialist skills and experience may be needed.

Organisations also need to be wary of biting off more than they can chew.

“Big and complex programmes can often result in customers placing a whole lot of risk in the hands of a supplier. Employing a big name with global credibility may make the board feel reassured, but you need to understand whether you have the capacity to run the programme and manage your supplier. Many large systems integrators can become unstoppable machines when they are seconded in your organisation,” he says.

“We recommend customers use a client-side advisory team, with experience of delivering major programmes, to ensure that systems integrators, and large and unfamiliar providers, deliver to their commitments. This allows you to focus on what you know best, your needs and your environment, while you have the assurance of professional support to manage the delivery process, change and quality,” Farrelly concludes.

Sidebar

It's all about trust

Peter Finch is CIO of systems integrator Gen-i and effectively works on both sides of the vendor/user fence. He can see how Gen-i offers its services to IT bosses and, as an IT boss, he also purchases such services himself.

Finch says Gen-i sells itself as more than just a large-scale generalist, adding it also has specialist skills. It seeks to develop a positive relationship with businesses based on it delivering positive benefits to customers through understanding them, their business problems and their challenges.

Rather than simply being around to sell kit, Gen-i seeks to have a relationship based on honesty and trust, says Finch.

Partners should be selected on capability, which should be proven through references, to ensure organisations have a proven track record.

“Be really clear when you are dealing with a consultancy that all aspects of the relationship are covered, not just costs. Have they the people to do it; what is their track record; is it reference-able; what will they bring to the future, say, two-three years down the line?”

Contracts must also be flexible, to allow for change in a dynamic world and to offer incentives. The best contracts are those placed in a bottom drawer, he says. This happens when they are clear enough that both parties understand what is expected of them.

Finch also warns that if a contract is simply designed to drive down cost — and the partner is to derive the profit — that will create conflict. The customer has to create an incentive for the supplier.

Suppliers also need to feel comfortable in a relationship and this also needs honesty.

“If this relationship is hurtful to me, I will say to the customer: how we can change it? I would expect a customer to say the same to me if it wasn’t working for them,” he says.

Suppliers must also be honest if they don’t have the answer, and they must say when a better deal is available. This means understanding the needs of the business, rather than just selling the latest technology.

Suppliers also need to measure and monitor how customers feel, which is why Gen-i uses an independent third party to measure the value it delivers to customers. Such information is then shared to see how matters can be improved. Open communication matters more than a standard SLA.

Now, wearing his CIO hat, Finch says he expects his suppliers to deliver experience and to understand his business, so they can provide a relevant solution to his problem.

“If I have an urgent business problem, I expect you to move Heaven and Earth for me. If you do that, I will honour that relationship going forward in terms of supporting you,” he says.

“As a CIO, I look to see what I can do to help the partner. I might bring purchasing decisions forward, to help the partner achieve targets, if I feel they are focused on bringing value to me,” he says.

So, what does a Gen-i customer such as Harcourts have to say?

CIO Jason Wills says having 600 real estate offices across Australia and New Zealand, it is essential to have a supplier with a solid reputation and which serves both countries. Contracts last no longer than a year, as technology moves fast.

Wills says Harcourts works closely with its preferred suppliers, offering them opportunities to take part in its conferences to set up an exhibition booth, so they can offer other services to Harcourts’ 5,000 staff. There are also regular meetings and invitations to functions and Christmas celebrations.

As a large company, Harcourts prefers “a big shop”.

“It is purely a numbers game, and more often than not smaller companies don’t have the international or national coverage to service a company our size.

“We’ve found Telecom/Gen-i to be very good. With Telecom owning AAPT/Gen-i in Australia, it has enabled us to offer the complete solution to our team across most IT systems.”

“We have had a really good run and the only challenge really has been in Australia. With our account manager located in New Zealand sometimes it has been hard work getting action over the Ditch. If you can get one point of contact then this streamlines all communication.”

Wills advises systems integrators to make their sales pitches short and concise, and to always ensure the customer has time to speak.

“Too many suppliers come to us with great ideas, new technology etcetera, but they have weak presentations that go on far too long. Keep your presentations to under 30 minutes and you will have a better chance of a meeting,” he says.

“Integrators should also do their research. First, on what the potential customer is currently using, current suppliers, etcetera. There is nothing worse than an integrator not having any idea about our business and coming to us with something that is not even close to meeting our business needs.”

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