Managing multiple IT vendors on a major project, like taking more than one date to the dance, can be an exhilarating success or your worst nightmare come true. Yet such arrangements are becoming a routine part of IT management.
A recent Gartner Inc. research report states that by 2008, 70 per cent of organizations will use at least four sources for the delivery of IT services, yet fewer than 30 per cent will have the right resources and processes to manage multiple sources. ITIL, a widely accepted standard for IT service management, emphasizes the alignment of IT services with business requirements.Text
What are the right resources and processes?
While many companies continue to apply traditional procurement and contract management practices to deal with each vendor separately, it is now possible to outsource your outsourcing to some major IT players.
There is also a growing interest in applying policy-based standards, such as the Information Technology Infrastructure Library (ITIL), to vendor management.
ITIL, a widely accepted standard for IT service management, emphasizes the alignment of IT services with business requirements.
Frequently, though, impending deadlines or a lack of resources force companies to come up with their own solutions to control complex projects.
THE INTEGRATION PROBLEM
During construction of their new data centre, Linda Weaver, CIO at Toronto based Smart Systems for Health Agency (SSHA), recalls that “we had seven parallel projects, with seven contracts, with seven primary vendors, all trying to create a piece of something that had to all knit together in the end.”
When SSHA started as a project of the Ontario Ministry of Health and Long-Term Care, its leadership assumed that a small team of contract managers could deal with the multiple vendors, each of whom would lead a particular project. It actually took more than 70 vendors and sub-vendors to complete the project.
And as the number of vendors and sub-vendors grew, Weaver realized they faced an integration problem. How would they ensure that the various components would work together seamlessly and with high availability?
At first SSHA asked each vendor for recommendations, but each suggested that the best solution was to make them the prime contractor over the others and all would be well. Unfortunately, the original contracts did not allow for this sort of relationship, and none would yield readily to one of the others. So Weaver brought them all into the same room and hammered out an arrangement that saw SSHA take the role of overall integrator, while each primary vendor continued to focus on their given project.
This meant that SSHA had to quickly build its own team of integration architects to pull each project thread into the whole fabric they were weaving. The decision to do so was justified by SSHA’s drive to meet its implementation deadlines. Although the majority supported this goal, the vendors’ focus on economic milestones was a cultural difference worthy of note.
Another lesson learned, according to Weaver, was the need to plan early for the integration aspect of the project. There was nothing unique about the technology used, she insists. What was unique was trying to knit it all together in a high availability framework, on such a large scale, and all at the same time.
Jim Burke’s experience in building the IT infrastructure for several new terminals at Toronto’s Pearson International Airport certainly bears out the wisdom of careful and rigourous design at the beginning of a complex project. As CIO of the Greater Toronto Airport Authority (GTAA), Burke oversees the work of well over a hundred vendors that contribute to Pearson’s technologically friendly environment.
Realizing early on that no one vendor could handle the IT side of what Burke describes as Canada’s largest construction project, the GTAA structured its bidding process to encourage partnering. “We were trying to structure the rules of bidding engagement so that I could look to long-term partnerships,” he explained.
Once the vendors were convinced of the significance of the project, they leapt at the opportunity to promote its success, and threw in a huge amount of support to ensure that success.
SEEING THROUGH TO THE TOP
A tactic that both Burke and SSHA’s Weaver employed with good success was to create and nurture open lines of communication to the vendors’ senior executives. This ensured a level of transparency that allowed both sides to anticipate issues and develop solutions well before they became crises. “We listened to their advice and tried to understand their circumstances,” added Weaver.
The best way to ensure understanding is to speak the same language. And, according to David Lloyd, CIO at Dexit Inc., that’s what ITIL does for them.
The Toronto-based company, which provides cashless payments for small purchases using a Radio Frequency Identification (RFID) tag, chose Allstream Inc. as their primary IT services vendor. “By using common philosophies and approaches, you not only create a level playing field, but the nomenclature between partners is the same,” explained Lloyd.
For a young company like Dexit, another benefit of partnering with an established standards-based vendor like Allstream is to speed their own development of best-of-breed practices, a strategy that Lloyd has deliberately adopted. Allstream is an ITIL shop, and Dexit is in the process of adopting an ITIL framework. A tactic that both Burke and SSHA’s Weaver employed with good success was to create and nurture open lines of communication to the vendors’ senior executives. This ensured a level of transparency that allowed both sides to anticipate issues and develop solutions well before they became crises.Text
At the GTAA, Jim Burke looks at the adoption of ITIL from the opposite side. Noting that he and his line managers need to focus a lot of time and energy on their non-ITIL vendors, Burke warned that this deficiency leaves these vendors exposed. “As each month goes by, we realize how important ITIL is,” he added.
Another common thread evident at Dexit, SSHA and the GTAA is their decision to maintain ultimate control over the vendor management process. Yet each had a different reason for doing so. SSHA felt that the additional time required to tender the contract and bring the winning bidder up to speed would add an unacceptable delay to their timeline. The culture and framework of accountability at the GTAA favoured the active management of vendor relations by a leader like Jim Burke. And at Dexit, Lloyd said they might consider outsourcing vendor management, but only when the company is ready.
Viable alternatives to self-management of vendor relations already exist. For example, HP’s Integrated Support service claims impressive management-related savings for their clients. By offering deep experience and standards-based practices, services like this have been attractive to companies that don’t want to outsource all of their IT services, but prefer a single point of contact for all of their vendors.