In the context of shrinking budgets, limited resources and constantly shifting business needs, companies have to actively review current support services contracts with an eye toward gaining maximum value. Only when an IT organization identifies where it needs better support, the gaps in internal knowledge and the opportunities to save money can it go out and get the best possible deal.
The first step in prioritizing support services needs is to examine the entire infrastructure to determine all points of failure and system interdependencies. Companies then need to assess which of those systems—including hardware, operating systems and applications—currently and for the foreseeable future provide business-critical functions.
With hardware prices constantly dropping, IT managers have new opportunities to add redundancy to systems that at one time could have been viewed as single points of failure. These include network and Internet connections.
IT managers should explore how increasing the number of systems for redundancy could mean scaling back to less expensive service options. When the failure of a single system will not result in widespread loss of service, forgoing the expense of dedicated on-site vendor support can be an option.
Systems and software arent the only areas where companies should consider adding redundancy, however.
Getting the most out of available staff through cross-training and defined backup roles will help IT organizations better serve their customers. Improving an IT staffs skill set can be easier to accomplish from a budget perspective when training is included as part of a support contract. However, managers need to pick the right training options in the context of the business climate.
Look at Existing Agreements
Look at Existing Agreements
Once an IT organization has prioritized its needs, understanding how it currently uses support will help free up the budget in less critical areas.
Look for service and maintenance contracts on software that has never been deployed or isnt currently in use. This low-hanging fruit can help boost the budget in lean times.
Companies should also consider consolidating contracts that exist for separate divisions and business units. In addition, large organizations should look at negotiating contracts so that staff at independent business units can access resources from a pool of support options.
Many basic support offerings include ways to track issue resolution and usage, so IT management should be examining quarterly reports to make sure usage matches the level of service purchased. For vendors that dont provide ticket tracking and quarterly and ad hoc reporting, companies should consider using internal help desk systems to get a sense of which systems require the most support.
Getting the Best Contracts
Getting the Best Contracts
In a survey of end users by Gartner Inc., 55 percent said service agreements did not provide return on investment or strategic business value.
This may be caused, in part, by the legacy of vendors selling support well after the software deal has been done, according to Bob Igou, an analyst at Gartner, in Stamford, Conn. Key to getting the best value is making sure an appropriate level of support is purchased with the software. Dont even entertain a pitch from a vendor sales representative unless it includes an explanation of the products support options.
One important factor in getting the best agreement is broadening the options and spelling out key terms. Shopping around and looking at options such as third-party support providers, outsourcing and ASPs (application service providers) can give companies alternative ways to achieve broader support coverage, reduce risk of downtime and free up resources to better manage other systems in the organization.
Companies also shouldnt discount weighing softer criteria, such as flexibility and responsiveness to feedback, because these factors can be important when dealing with sudden business growth and change.
Contracts for premium services should stipulate the size and expertise of a dedicated account team and ensure that it is always adequately staffed and trained. Having an understanding of a vendors internal organization and support management processes is also a good way to ensure it has the infrastructure to back up incident escalation terms.
Understanding interdependencies among applications and system hardware as well as the expertise available from all relevant vendors helps organizations create appropriate escalation paths or identify third-party support providers that can effectively manage critical-situation resolution.
With vendors now often including consulting and training as part of premium service offerings, having a sense of upgrade plans and travel budgets can give IT organizations a way to negotiate features they may not use, such as off-site training, in exchange for ones they likely will use, such as consulting.
Companies also need to negotiate how unused consulting hours and support incidents can be rolled forward to new contracts or be credited in other systems purchases.
The next step up the services ladder, outsourcing, gives companies a way to shift almost all support burden for a product to the vendor.
Although outsourcing an application is likely to be more expensive than running it in-house, outsourcing often gives companies the ability to focus on more business-critical initiatives.
Outsourcing can also provide better application reliability and availability because the vendor hosting the application has the best level of expertise in that application and can control the environment so that compatibility with hardware and other applications becomes less of an issue.
ASPs can likewise add some value from a service perspective because of the way they inherently handle front-line support for a product.
ASPs can differ considerably in the level of service they provide, however, with some projecting rather than guaranteeing uptime. Support hours and customization offerings can differ substantially as well, with few providers offering the level of customization and support hours available with off-the-shelf applications.
Technical Analyst Michael Caton can be reached at [email protected].