SVR #2

Hello, all my dark minions in the consulting industry!!! Have you ever low-bid a contract, knowing that once you got deep into it, the client would be as professionally invested in the success of the project as you, and would carry the can back to management for more funding? Come on, chums, you can be honest with me, didn’t we row together at Oxford?

Sadly, our old mates at Oracle got their hands caught in the cookie jar recently. They thought they were building a strategic vendor relationship with Montclair State University. Everyone was friends, all pulling together for success, and then some loser decided to knife them in the back instead of being chums!

“When issues arose during the course of the project, it became clear that MSU’s leadership did not adequately understand the technology and the steps necessary to complete the project,” [Oracle] stated. “Instead of cooperating with Oracle and resolving issues through discussions and collaboration, MSU’s project leadership, motivated by their own agenda and fearful of being blamed for delays, escalated manageable differences into major disputes.”

Right ho! Instead of “cooperating” and “resolving through discussions and collaboration” (oh! and an extra $15M!) they created a major dispute. Bollocks! It’s this kind of unfriendliness and lack of trust that can turn a super strategic friendship and awesome partnership relationship into a garden variety contractual business arrangement, and who wants one of those?!?

And, to add to the betrayal, I guess someone at MSU used to work in the consulting industry (zounds!)

“This is a textbook example of how to file a legal action against a vendor for failure to deliver,” said analyst Ray Wang, CEO of Constellation Research, who reviewed the updated complaint on Wednesday.

MSU made some smart moves to protect itself, such as documenting all conversations and interactions with Oracle, and working out an escalation procedure in the event the project ran into problems. It also was wise to use real-life use cases for the demonstrations, Wang added.

I’m glad I live in a jurisdiction where clients and vendors know how to get along.


I find much to love in the BC CIO’s “IM/IT Enablers Strategy v1.5 for Citizens @ the Centre: B.C. Government 2.0” (well, perhaps not the name!) but there is one section that chills me to the core: Strategic Procurement.

At the heart of “strategic procurement” is the “strategic vendor relationship” (SVR), wherein “enhancing the government’s relationship with key vendors [emphasis mine] will lead to more agility in responding to new needs, or making full use of emerging technologies”. What part of working with “key vendors” enhances government’s power in the vendor/customer relationship? Where do market forces come into play?

How will we know which vendors are strategic and which ones are a waste of our time? Will we play golf with them? And those non-strategic vendors, what of them? Do they get to play golf too?

Verily, there is only one place this leads, and the name of the beast is “Master Standing Agreement”, or more colloquially, the “[HP|IBM|Accenture] Always Gets a Piece Act”. The same actors will be arranged in the marketplace, but the small ones will only get to access work via large ones, who will always get a (the most) lucrative piece.

It’s nice that the BC IT bureaucracy is coming to grips with its co-dependent relationship with the big consultancies, but unfortunate that the reaction is to formalize co-dependence as desirable in the master strategic plan.

Note to readers: I’ve heard talk of a “vendors solutions center” or something like that floating around, anyone have any links or documents they can share?

This (and everything else, it seems) reminds me my favourite technology joke, from circa 1995:

How many Microsoft engineers does it take to change a lightbulb?
None, Bill Gates just declares darkness to be the new standard.

F*ck You. Pay Me.

I really enjoyed Mike Monteiro’s talk, “F*ck you. Pay me.” and it curiously fits into my current writing jag: finding value in your “cost centers”.

The curse of IT is that it is a cost center, not a profit center. This is true even for an internet company like Amazon – the profit is in selling those damn books not in running the web site (OK, not true anymore, with Amazon Web Services, Amazon is actually monetizing IT directly now, but cut me some slack here).

As a cost center, the only way IT can directly contribute to the bottom line is to reduce costs. And if IT is managed in a silo, separate from line business (or worse, outsourced), things can go seriously sideways. Reduced services and responsiveness from IT can reduce effectiveness or hamstring line business areas that do generate profits. In chemistry terms, IT is not the reactant, it’s the catalyst, but it’s still critical to generating the reaction!

What does this have to do with Mike’s profane little talk? One of his main points is that, in running his creative business, his legal advisor has been absolutely critical. As Mike says (pointing to his lawyer) “this guy makes me money”. Well, no, taking the narrow view, the lawyer only ever receives money, he never gives it back. But in the global view, looking at all the money the company didn’t lose due to bad contracts, or due to broken customer relationships, or due to misunderstandings of obligation, Mike’s lawyer has generated far more value than he has billed out. He’s a quiet profit center.

If you treat it right, IT can do that too.

More In House

Hot on the heels of my post about doing work in house, InfoWorld’s Deep End column takes a look at build-vs-buy.

Relying solely on support contracts and generic solutions is a good way to self-limit the agility and performance of any business. In short, more gurus equals less hand-wringing and stress all around.

In an era when software is eating the world, information agility is key to competitiveness (or, in government terms, “effective service delivery”), when competitors are investing heavily in brain power, why would any organization dumb itself down?

Do It In House

This morning, I was struck by this nice write-up about how the Hungarian railway accurately geo-located and inventoried their assets:

The work was done entirely by MAV employees which made it much less expensive than if external contractors would have had to have been used. Overall it is estimated that as a result of using internal resources and a GPS/GLONASS-based approach the project was 16 times more efficient than a traditional survey. And the project generated a lot of pride among MAV employees who carried out the work because it was such a remarkable achievement from a data collection, management and quality perspective.

Here’s is an incredibly stupid thing for a consultant to say, but nonetheless: if you can do it in house, why wouldn’t you? Even if it’s a bit of a stretch, your in house resources:

  • have a predictable cost structure
  • already understand your core business
  • have a feel for the historical reasoning behind business processes

New IT infrastructure is strategic almost by definition. Why would you outsource your most important strategic initiatives? If you’re anticipating failure, perhaps it’s a good idea. But if you succeed, you’ve just invested in building intellectual capital in a population of people outside your organization. And you’ve lowered the engagement of your core staff in the future of the organization.

Familiarity breeds contempt, and it’s all too common that management is most contemptuous of the people they are most familiar with: their own staff. Hence the lure of the shiny consultant (love me! I’m shiny!).