While CIOs and IT departments only try to compete with external service providers on cost; they are eventually going to lose by being so one dimensional. At some point, you will be unable to reduce costs any further and to be honest, I suspect many internal IT suppliers are already at that point. For costs to fall any further, the service provision is going to be impacted. And I think that we are already there but then again perhaps the service wasn’t so great to start with.
It is time to focus on Better and Faster; if customers are getting a Better service and a Faster service, the pressure on Cheaper may abate but whilst service is not getting better and delivery is not Faster; your key metric as a supplier will continue to be cost.
How galling is it to loose business to a supplier who is charging a premium? No-one wants to loose to that but it happens all the time in IT. Many of the big suppliers would be out of business if IT was simply a race to the bottom but we as customers often make a decision to pay more for what we believe is a better service and product. In fact, in the long term, we often believe that the decision will work out to be cheaper (believe /= know; this is a different problem!).
So we know this is a better way to procure IT in general. And yet, we do not often focus on the Better bit in the value proposition that we present to our internal customers.
So I wonder how we get to this position and that is too take a leaf out of our vendor’s books. Learn to market and sell all the advantages of the Internal IT supplier; focus on the Better and Faster, be competitive but do not get involved in a race to the bottom.
But be mindful of costs; deploying Faster is often Better for our customers but it can unnecessarily raise costs or at least lead to infrastructure deployments being less efficient at first deployment but too often first deployment is the last deployment until something goes wrong or it is time to refresh.
In the background, there needs to be a team which is constantly working to improve effectiveness and efficiency; taking services and tuning them, improving them and driving down the cost but not at the cost to the service.
Better and Faster; let the Cheaper follow….it almost certainly will do. Experience suggests that doing to do Cheaper first nearly always sacrifices Better and Faster.
