Problems include not knowing the exact services you have, SLA’s for providing the service and whether or not you’re paying too much. Recognizing the “whether or not” in itself is an enormous problem and a difficult task. However, there are unique service offerings and software based toolsets which companies can take advantage of to fully understand their current vendor environment.
IT costs are often seen as a small percentage of business expense, generally sitting under 5% of overall business expenses. Many leaders in the past have focused on larger areas, avoiding taking a deep dive into IT cost because there are often complexities (multiple locations, deep-dive auditing of bills, managing a renegotiating contracts) for a small return in cost savings.
A strong external IT resource will still need a focused system in place to manage their day-to-day impact on your business. However, one major problem in the IT industry is that company’s internal IT teams don’t have the time and, in most cases, the resources to manage their IT, Telecom, and VOIP systems at a micro-level. They are too busy managing the system-wide issues that arise daily and impact employees’ productivity on a ground level.
A team mentality must be brought to the contract development and negotiations phase. In too many companies, outsourcing contracts are left to purchasing, legal, and senior executives, then assigned to the managers and staff who will be working with the vendor on a day-to-day basis.Operational staff and process owners don’t always understand the complexities of the initial contract. It is signed and filed – end of story. However, the question remains… is the contract still measured for performance, ensuring nothing which is critical during the life of the contract has been overlooked or omitted?Management teams can deal with hundreds of contracts at once, so it is easy for a contract term, condition, or renewal to slip through the cracks.