How To Choose Your Managed IT Service Provider
In opinion / By Howard Smith / 24 January 2018
Like any major procurement decision, choosing an external provider to manage your IT needs careful consideration. IT is, after all, the lifeblood of your organisation, so it shouldn’t be handed over lightly.
Decision number 1: One partner or more?
One of your first decisions is likely to be whether to appoint a sole IT partner or a panel of two or more. One keeps things simple – and usually means savings as a quid pro quo for granting exclusivity. The second option will introduce the element of competitive tension, but could also increase your management oversight workload.
Either way, devise a tender process that takes into account your organisation’s current and future IT needs, its culture, its wider strategic goals and, of course, your budget.
Set up your tender team
Create a team representative of the main IT stakeholders across the business. As well as yourself, involve at least one other person from IT to act as your deputy, and be sure to include someone from the purchasing/procurement department. As well as adding valuable negotiating clout, they’ll keep you compliant with internal buying policies and any ethical requirements around issues such as accepting gifts and hospitality from bidders. Be clear about who will have the final say as your team members may have differing agendas, making consensus difficult to achieve.
Like all serious business procedures, the tender process enjoys its own TLA (three letter acronym). And in this case, it’s the RFP – request for proposal. The RFP is your opportunity to spell out to potential bidders what you want from them, and what they can expect from you. Devote an entire meeting of your tender team to discuss the key elements of the RFP, which are:
- Why you’re outsourcing - Reasons to outsource include streamlining internal operations, reducing costs, bringing in specialist expertise and getting help with digital transformation. Letting bidders know the purpose of your RFP will help them frame their bid accordingly.
- The key dates in the tender process - Give bidders a closing date to submit their response and tell them when you’ll be assessing bids. Set out too, when you’ll be holding meetings with shortlisted bidders. Conclude your timetable with your target start date, the duration of the initial contract and any milestone or review dates.
- The information (and proof) you want - Define the expertise you’re looking for in your managed IT partner(s) and evidence of previous accomplishments. Seek assurances that they have both the skills and capacity to take your work on. And always, demand sight of bidder’s credentials, such as ISO 27001, adherence to the CIF code of practice, etc. To save yourself time at the assessment stage – and to keep bidders focused on your needs (as opposed to a meandering sales pitch) - consider a word limit on the responses to this section.
- How you’ll assess the bids - Take all your team’s needs into account. Some people will be cost-conscious, while others may be concerned about response times. You may find a system that combines point scoring and human judgement works for your business as a whole. Whatever system you decide on, explain it in your RFP.
- Budget (optional) - If costs are critical and you have a specific figure to work within, include it. This will save a lot of time further along the process. On the other hand, if your budget is variable or there are other factors higher up your list of priorities, avoid boxing yourself in with a figure at this stage.
Invite your bidders
With your RFP ready, decide who to send it to. What type of managed IT provider do you want to work with? As this will be a close relationship, consider any existing suppliers you may already be working with. Can they scale up to meet the needs of this tender? Do you need a technical or industry sector specialist? Would you prefer an established business with a proven track record or a hungry new entrant in the market?
Give bidders plenty of time to respond. The serious ones will want to do more than simply fill out a form. Some may even create an internal team of their own to put together and cost the skills, supply chain and an account team for you.
Narrow it down
When your closing date arrives, gather your tender team together to assess the RFPs. Put your evaluation system into practice and ensure you get the opinions of everyone around the table. Getting a consensus as to which bidders should make the shortlist may involve some discussion, so ensure you give this step the time it’ll need.
Once you have a shortlist, invite those on it to a meeting. As well as sussing out if the ‘chemistry’ is there, thrash out any queries raised in the RFP. Talk about costs, too.
The next stage is to narrow your shortlist down to the supplier(s) you want to go ahead with. Again, consensus is ideal but you may not achieve absolute unanimity. However, if you can demonstrate you’ve taken everyone’s input into consideration and made it clear who the final decision rests with, you’ll reach a workable outcome.
Communicate your decision to your organisation’s senior management in order to secure the resource you need to proceed.
Then, once you’ve entered formal agreements with your chosen supplier(s) inform the unsuccessful bidders, ideally by phone as well as in writing, as soon as you can.
Start work with your new IT managed provider(s)
Start off by setting key objectives and where, appropriate, project milestones. It could also help to arrange for key people from the supplier(s) to visit relevant sites and establish relationships across your organisation.
If you’ve opted for a dual- or multi-vendor arrangement, agree fee structures and set out a process for issuing mini-tenders.
Finally, keep the relationships under constant review and take time to strengthen your working relationships with your external IT providers.
We've worked with some of our clients for over 15 years and our objective is always to become part of team rather than just a passive provider. We strive to be a partner that is constantly adding value and providing guidance to our clients therefore the majority of our clients stay the distance and we value that relationship hugely. Read our story here.