Innovation: Did you get any?

July 24, 2016 | Khalda De Souza

Innovation: Did you get any?

Buyer: “This service provider delivered no innovation, thought leadership, or long-term best practice management advice for my business process.”

Me: “Did you ask them for any of this?”

Buyer: “Erm….no.”

Alright then. It’s funny how many times I’ve had a similar conversation with IT services clients over the years. Luckily at HfS we take into consideration that there’s usually two sides to every story – otherwise some service providers would consistently be scored badly in any innovation or thought leadership category in our research reports. So, why is this happening? It seems to come down to one of three reasons: 

  1. The beauty of hindsight: Buyers often don’t know what they need until the end of the engagement, particularly in a deployment project. At that point, they can very easily highlight all the processes, approaches, methodologies and advice that would have been fantastic to have had access to prior to implementing the solution. Service providers do however have a responsibility to explain all of their capabilities and all the points the buyer needs to be aware of before starting the implementation. It would then be up to the client to decide whether they want to contract the service provider for these skills, use in-house skills, cross that bridge at the appropriate time, or frankly ignore it.
  2. Not required: Sometimes buyers engage in a detailed consulting project with a consulting provider, and then use a separate implementation provider. This is particularly true in the SuccessFactors services market. Clients assume that every possible eventuality has been considered in the consulting phase. The implementer is often selected based on its technical capabilities and its cost effectiveness. Complaining that this provider did not provide any thought leadership or viewpoint outside of specific module implementation is simply unfair. Often the service provider has successfully completed the exact work it was contracted for, which in my book counts as a successful project. Again, it’s probably wise for service providers to point out to clients exactly which skills and engagement levels to expect for the price the client is willing to pay.
  3. It’s all Horses for Sources: Sorry for the pun, but frankly, every enterprise defines innovation or thought leadership in a different way. I once had a mid-sized buyer enterprise with zero sourcing experience tell me that their first engagement with an IT service provider was ‘out of this world! They put the stuff in, they were very nice, and it all worked!’ Whoopee. I doubt a large enterprise who has been outsourcing for decades would get as excited about this achievement.

So, buyers and service providers alike need to have the innovation, thought leadership, or whatever they care to call it, conversation upfront.  That way the service provider knows exactly what they are required to deliver and the buyer knows exactly what they will get and what they’re paying for. Remember: if you want some value add, I’d tell someone.

Posted in: SaaS, PaaS, IaaS and BPaaS

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