The special problems of IT procurement

Is IT being procured? IT procurement is usually difficult and stressful, and characterized by some degree of failure. If you have experience otherwise, you are very lucky. Most IT procurement ends up costing more than planned at best, being late as a matter of routine, failing to deliver some important aspect of what was specified also as a matter of routine, and not infrequently not working at all. It is not the job of this book to speculate on why this is so, or what the IT industry may do about it[2]. It is the job of this book to ensure that we all understand that IT procurement is so highly risky that it needs special handling and very careful attention in any project. It is conventional to involve IT specialists in the procurement of IT, although whether this reduces the risk at all is debatable, but you will probably be unwise to try to buck this fashion.

If your project involves procuring IT, ensure that your procurement team or contracts manager has extensive experience of this, and take special care to ensure that you protect your own position and the project's by documenting everything.

The following principles will be useful in IT procurement:

  • Insist on seeing a demonstration of all key equipment, programs, interfaces, etc. Do not accept 'canned' or pre-prepared demonstrations; insist on live demonstrations with data from your project.

  • Do not believe any time schedules for delivering things which do not exist right now or cannot be demonstrated right now. Double them for your planning purposes. If they slide, double them again.

  • Treat cost estimates from suppliers as for time estimates.

  • When any supplier makes an estimate, get them to put it in writing, and if they don't, you should send them an e-mail documenting what you think they said.

  • Even if an aspect of a requirement is obvious, such as that a database should have a search function or that a text editor should be able to edit text, make sure this is documented.

  • Use a set of rules of thumb to help you and the procurement team judge the fairness and reasonableness of cost and time estimates from IT suppliers.

An example of a rule of thumb, above, is that a small to medium-sized database should:

  • if performed in a small company environment, take one man-month to produce at a cost of about 15,000;

  • if performed for a medium-sized or large company, take one month to produce in pilot form, and should cost no more than 50,000 (the extra cost being the extra bureaucracy involved in communicating with the larger company);

  • and either way, about half of IT suppliers will try to charge 100,000 for such work.

A good IT procurement manager will have a number of rules of thumb such as these, and will also have a clear enough idea of what 'medium-sized database' and other such terms mean to make the rules of thumb useful.

Case study

Example of the special problems of IT procurement

One of many examples of problems in IT procurement was of a large paint manufacturing plant trying to procure and install an IT system with bespoke software. The levels of data entry, reliability of the hardware and computer interface, together with the number of interactions involved from manufacture to despatch, resulted in the recording system failing to provide both the accuracy and consistency required for quantifying the resources used and the production of management reports detailing volume output and efficiency.


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Definitive Guide to Project Management. The Fast Track to Getting the Job Done on Time and on Budget
The Definitive Guide to Project Management: The fast track to getting the job done on time and on budget (2nd Edition)
ISBN: 0273710974
EAN: 2147483647
Year: 2007
Pages: 217
Authors: Sebastian Nokes
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