The former CIO of Hampshire County Council, Jos Creese, has announced at a conference last week that more companies should consider renegotiating their IT software and services contracts, if they want to benefit from new technologies.
As Creese, who now works as an independent consultant, asserted at Computing’s IT Leaders’ Summit in London, "During my tenure at Hampshire County Council, we went through a lot of change around our IT estate, renegotiating pretty much every single one of our contracts under an IT category management approach.”
According to Creese, IT buyers are usually too prescriptive throughout the procurement process, regarding how services are meant to be used in the company and the basket of goods which will enable the service to work in the envisioned way. It is against these pre-established specifications that suppliers are assessed and chosen; however, Creese believes that this method does not allow enough flexibility, “Because the way in which we use out networks today is probably very different from even how it was 18 months ago”.
"So, my view is that you need to keep your contracts much more flexible. You need to admit that you don't know what you are going to be using all this stuff for. I'm not saying you shouldn't have some measures - benchmarking is important - but you need to have enough flexibility in your contracts for you to be able to go back and say, 'I now want to do something very different'," he concludes.
Creese also stresses the importance of value over price in negotiations. IT buyers should always keep in mind the organization’s needs and desired outcomes throughout the negotiation process.
"There's so much written about how to negotiate the lowest price based on your detailed set of requirements. But the unit price really isn't the issue... the impact of technology and what I would call 'digital' on business can add enormous value", he explains.
Creese believes value should always be the most important variable in negotiations. According to him, technology has the potential to create efficiencies and business opportunities for companies which would otherwise not be possible. If driving costs down is the sole or prime concern of the negotiator, then the company will not reap all the potential benefits of technology.
Finally, Creese touched upon the issue of the public sector’s imperfect track record in procurement, remarking that public procurement bodies often “buy the wrong things, at the wrong price, and at the wrong time”.
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