The IT Outsourcing RFx COW is Too Fat
By Ernie Zibert
Copyright 2011 Ernie Zibert
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Table of Contents
Smarter
Cheaper
Faster
Better
Greener
About the author
Other books by this author
Contact the author
In this booklet I cover the important topic of tendering for IT Outsourcing (ITO) Services.
Tendering (RFP, RFI, RFx) is the one domain of IT sourcing which has not moved in line with the
changes in the market-place. The IT tendering process is important, but not critical to value
maximisation. Why? Because most of the value lost in IT sourcing comes after the contract is signed.
According to The Corporate Executive Board Company (2009) 90% of ‘this loss occurs after the
vendor has been chosen’. Since the tendering process only accounts for up to 10% of potential value,
customers should ensure that their tendering process is smart, cheap, fast, better and greener than
historical or traditional tendering models. What does this mean?
SMART
Do not re-invent the wheel. Most IT services, and indeed, all infrastructure related IT services
are mature and so are the tendering processes. If you’re not sure on the best practice process, invest

accompanying T&Cs. The duration of the tendering process is correlated to the cost. So the rule here
is to keep it short. I recommend no more than four weeks for the majority of infrastructure
services.
For example, for on-site support you should know all of your company’s sites, so just get the
quote and the concomitant T&C’s. For a Service Desk service, you should know your hours of
coverage and call volumes. For monitoring and management of your servers and network, you should
know how many servers (virtual or physical) you have and their location.
BETTER
To make your tendering process better ensure you have built flexibility into your contract.
Again, cloud based services have led the way here. Most offer a one month service term. Some even
offer a per hour cost model. The key here is to make the terms of any agreement short, no more than
12 months and make certain you have a one month or at the very least a 90 days no fault, no
fee, exit clause. A lot of change can occur in 12 months and you want to ensure you can respond
effectively to any changes and not be constrained by an out-of-date or misaligned IT services
contract.
GREENER
This dimension of sourcing business value is largely dependent on the above four value
attributes. If you are smart and don’t waste hours on your computer/tablet inventing and printing a
contract and its numerous drafts you are greener. If you keep your IT tendering process cheap and
fast you are greener. Spending less time means less potential for waste; less meetings, less people,
less noise. Using an external service provider is intrinsically greener as you are leveraging off an
already existing set of services. For example, hosting your server room in a data centre will, at the
very least, save your environmentals of air-conditioning and power.
Saving money is one of the non-negotiable rules of the tender process. And saving money can
only occur after the contract is signed. So why waste time in realising the savings of your IT
outsourcing initiatives. Make your sourcing COW lean and green. Remember that the time you spend
in the tender process delays the realisation of the savings and value from your sourcing initiative. So
keep your IT tendering process smart, cheap, fast, better and greener.
About the author:
Ernie Zibert is a senior IT sourcing professional and brings eighteen years international management