Managed.IT - issue 60

28 01732 759725 Being commercially experienced and commercially astute are different skill sets, and people confuse the two IT SOURCING have a Run Book contract, not one that is looked at by lawyers and then stuffed in a drawer, but one that has a monthly performance score-card element to it that helps you keep the vendor honest, it tends to count for a lot more than cost savings.” Lightbulb moment Despite Turnstone’s history of delivering cost savings and operational improvements, Brook says it can be hard to convince clients that they need help with sourcing. “One of my frustrations is that once we have done some work for a client, they have this lightbulb moment and say ‘This is brilliant. This is the best deal we have ever got’ and give lots of repeat business. But it takes a lot of one- to-one conversations and education and convincing to get engaged.” One reason for this, he suggests, is that people make the mistake of thinking that because they are intelligent and experienced and have haggled over the price of a house or a car, they are able to negotiate an IT contract. “IT people are some of the smartest you will find in an organisation. But being commercially experienced and commercially astute are different skill sets, and people confuse the two. We have done hundreds of contract renewals over the years and never found one that has green lights across the board. “It is quite a scandal really that vendors win every time. Over the years, their lawyers have developed contracts with terms that favour them, and they are very good at making it seem in poor taste to argue. One company recently gave a client of ours a discount, with the caveat that they had to sign within seven days or the deal was off – in other words, not giving them time Time for a contract MOT? As organisations take stock of their commitments after 12 months of accelerated digital transformation, David Brook tells ManagedIT why it pays to employ the services of an IT sourcing specialist With the UK vaccination programme in full swing and the lifting of all lockdown restrictions set for June 21, many organisations will already be reassessing their property, IT and infrastructure requirements after 12 months of digital transformation, emergency purchases and successful Work from Home initiatives. In doing so, it is inevitable they will want to review and possibly renegotiate contracts either because they no longer need the IT involved or because they entered into certain agreements in haste without proper scrutiny. But will they have the expertise to do this satisfactorily? Possibly not, says David Brook, co-founder of IT sourcing consultancy Turnstone, which provides IT contract MOTs, agile IT sourcing and RFP services to organisations with turnovers in the region of £50 million to £100 million. “Companies of that size typically have enough industrial strength IT to warrant us coming in to assist. We do sometimes go smaller if it is a growing client. We have quite a lot of activity with private equities and their portfolio companies, because they are growing companies with less experienced management teams that are on a growth trajectory, often dragging old systems and poor processes behind them. But that £100 million mark is our sweetspot,” he says. Brook claims that by running a well orchestrated market contest, Turnstone can normally deliver hard savings of 30-40%, as well as operational improvements that, in his experience, are often even more highly valued by the C-suite. “Savings are lovely,” he says. “But the fact that we can actually manage a vendor and keep them on the hook during build and run counts for more with CIOs. If you to do a proper review with us and negotiate the red flags we know are in there. Red flags are things like auto renewals or automatic price increases or lack of clarity over what the service is. That might sound bizarre, but it’s amazing the number of contracts we see where it’s not clear what the service is, let alone what the connected SLAs are, or what the pricing is.” Red flags Brook points out that there are about 90 terms in an IT contract, half legal and half the other stuff – the service terms, the pricing in and the commercial terms – that often gets overlooked but which is incredibly important, especially with the shift to an ‘as a service’ procurement model. “Services need to be clearly defined in plain English, and not just in terms of the technology stack being provided. There should be SLAs attached to them, there should be unit prices attached to them, so you can understand your invoice at month end.” Another common oversight is having no exit plan, an explicit schedule of who does what, by when and for how much money, in the event that you do leave early. “We regularly see clients that haven’t done that and when they want to leave the vendor has them over a barrel in terms of what it is going to cost, how long it is going to take etc.. It is good to be explicit David Brook

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