The enterprise sourcing environment mirrors consumption trends of the digital age: it’s all about more, more complex requirements, more choice, more international, more specialist offers, and more time needed to evaluate, select, track and manage these relationships. With no choice in the matter, companies now need to rely on in-house expertise and their wits to contend with multiple vendors, hard-to decipher needs and offers.
And the area most impacted by this shift? You guessed it, IT.
The shift to virtual infrastructure from in-house iron is a natural shift for companies that now rely on flexibility and scalability, in all areas, to remain competitive in a digitally disrupted business landscape. This means being ‘infidel’ when making choices about who to work with has become the norm (it’s hard to be loyal to brands when they don’t seem to know who you are anymore).
Despite this lack of brand-loyalty, when it comes to enterprise IT consumer isn’t king, vendors have a special advantage in technology, because of the complexity of the needs they respond to and solutions they offer. The onus is now on companies to procure the right combination of virtual servers, computing power, very specific or even niche APIs and connections, often on the vendor's terms. Any differentiation of the terms between providers often only lasts a few months, as the pricing and terms are public, the competition catches up quickly. This is a new and massive load for the in-house capacity planning experts who now need in-depth IT knowledge.
No New Faces
The sales teams or point of contact that once facilitated hardware and software maintenance for the on-site infrastructure have disappeared and have not been replaced in the cloud environment. A familiar face ready to find you the best offer doesn’t exist no matter how much you’re spending, just think of AWS.
A recent research report from Tech Pro that looks at changes into the work of IT professionals, underlines the irony of this situation, outsourcing work to third party vendors is creating more work in-house. Their research showed companies dealing with more vendors than ever before, and a corresponding increase the workload, required to to track and manage these relationships. It’s not only servers that have moved off premise, Tech Pro’s research found “a steady shift of the IT workload toward managing contracts and coordinating jobs with outside vendors. This shift has brought about a need for IT departments to develop internal expertise in areas like contract negotiation and administration and vendor relationship management.”
As the scope of IT has grown under the cloud, specialist vendors are needed for their technical knowledge into areas such as hardware, cloud services, and security and compliance. And in turn, specialist tech knowledge is needed to communicate (dare we say negotiate) with these vendors, so more often than not the management responsibility for these relationships fall on the IT departement, those in the know.
Good & Bad
But it’s not just about added workload, working in partnership, with, namely, hardware, network and application vendors (albeit time consuming and expensive) provides best-practices, problem-solving and an outside perspective on your projects and processes that you wouldn’t get from in-house staff. While issues remain around poor responsiveness to help requests and constant personnel turnover at vendor companies, working with outside vendors is to be embraced considering the complexity and specific expertise required to remain competitive within today’s evolving enterprise cloud environment.
Tell us what you think, have your expectations of vendors have matured. Are your vendors expected to conform to service level agreement (SLA) standards that meet the same security, governance, and operational goals you expect of work done in-house?