Infrastructure Issues

What are the issues in acquiring and managing the IT infrastructure

Strategic Partnerships

Outsourcing, etc.

Installation

Acquisition RFP and RFQ

benchmarks and penalties

MaintenanceService

Preventive and restorative maintenance Outsourcing

Outsourcing of IT Functions

Traditional Outsourcing: removing IT from a function for a long term (10 years)

Transitional Outsourcing: using outside services to move to a new environment over a short term (1-3 years)

Product Acquisition: purchasing functionality rather than building it

Outsourcing Difficulties

Contracts are structured for long periods (10 years is normal)

Early benefits are clear for the customer; late benefits to the outsource supplier(When the benefits start building for the outsourcer,

the customer starts wanting change)Few outsourcers large enough for big projects

(EDS, CSC, IBM, AT&T)Technology evolution changes strategic IT

relevance

Outsourcing Features

More than half of all firms are considering some sort of outsourcing activity

Acceptance of strategic alliancesWin-win alliances in many business areas

IT’s changing environmentFocus on networking and integration places

extraordinary pressures on legacy and state of the art systems management

Outsourcing Drivers

Management concern for cost and quality

Breakdown in IT performanceSupplier pressuresSimplified Company

management agendaFinancial FactorsCorporate culture

What Happens

Vendor specialistsCurrent IT organizationBasic services

Request for Proposals

OBJECTIVE: OPEN, FAIR COMPETITION WITH UNDERSTOOD CRITERIA

Qualified vendors should be offered an opportunity to bid.

Intelligence

In-houseVendorsConsultantsLiteratureSimilar installationsReview services (Auerbach, DataPro)

RFP Process

First Pass:

Eliminate unacceptable alternatives; reduce the choices to 2-4 alternatives.

Second Pass:

Select the final product.

Need to publish:

Written requirementsFormal presentation

Don't let vendors run the selection

Evaluation standards

RFP Contents

IntroductionInstructions

ObjectivesContactsTimetable

System RequirementsMandatory RequirementsDesirable Features

Evaluation Method

Evaluation Criteria

Features TableHard Dollar Evaluations

Soft Dollar Evaluations

Delivery DateAcceptance Criteria & PenaltiesMandatory FeaturesDesirable features

Desirable Features

ModularityCompatibilityReliabilityMaintainabilityVendor Support

Acquisition Strategies

Rent: Short term, complete vendor support, high cost

Lease: Intermediate term, local support, user specified equipment

Purchase: Cheaper, total user responsibility

Contract: Full vendor responsibility, contract sensitive

Validation

Test the proposed system to assure that it does what you want: Modeling Simulation Benchmarking Work sample analysis

Managing Product Contracts

You get what you negotiateInstallation is expensive

3%-15% of the installation costOngoing SupportLease Conditions

By user By device Site

Customization

Managing Service Contracts

It depends on what you want Commodity

Service level agreementsPenalties

RelationshipDispute resolution

Contracts and incentivesExit criteria

Copyright 1999 Doug Adams

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