How to make the optimal choice in the market of IT services

Anyone considering purchasing or developing IT services and products should focus on their own organization and that of the supplier. The starting point is determining the business activity to be supported. The right IT solution and partnership – an optimal mix of contract and relationship – will automatically follow in a few logical next steps.

Successfully applying technology and data within organizations requires awareness of their own wishes and requirements, but also a broad internal dialogue between business and IT. Insight and consensus are required to be able to consciously choose, for example, a standard product or a customized solution that distinguishes you from the competition. Five practical steps help to do this more consciously.

Five steps leading to the right governance

1. Determine ​​what business activity the IT solution will support. Is it about something generic or specific? Do you distinguish by value or by price? By making this tangible per activity, as business and IT, you have already made some progress.
2. Develop insight into the possible technological support of the business activity. Is a general IT solution sufficient, is a sector-specific solution required, or can you distinguish yourself with IT? Then you look for a corresponding technology.
3. If you know which solution you are looking for, you focus on the service. What does the ideal service model look like? Which activities do you want to carry out yourself, and which do you want to outsource to one or more suppliers? Do you only want to purchase software licenses or a complete end-to-end service? Or maybe something in between?
4. Based on these insights, you look around the market to see what IT service providers offer. What is their service proposition for you as a customer? Does this meet your needs? Then, choose for a product (software), convenience (implementation by the partner), developing the necessary skills (coordinating yourself) or exclusivity (high-quality and customer-oriented services).
5. Finally, each service type needs its own specific governance model: control (if you opt for a product), cooperation (convenience), coordination (developing skills), and collaboration (exclusivity). In the case of collaboration, coordination is partly the responsibility of the supplier.

Crucial elements: how to avoid making the wrong choices

This step-by-step plan contains some crucial elements. Primarily, focusing on the activity to be supported, but also steps three and four: determining the relationship between the desired service model and its actual availability on the market.

For example, in some cases, suppliers are unable to provide the requested convenience, and the company will have to develop skills itself. Knowledge of the strategy of the market party is also important: if the emphasis is on providing standard solutions, then this may not be the optimal partner for an IT need that distinguishes you from competition. Often multiple parties play a role in implementations.

Optimize existing IT solutions

The step-by-step plan can also help to review existing IT solutions and parties that supply them. Review the current and desired governance of the IT services. After all, intentions, wishes and objectives can change, and with them the optimal technological support.

Anderson MacGyver wrote the recent white paper Governing Market Services, including the method described above. For CxOs who value the right technology choices.