Especially if the balance of power seems to be completely skewed. After all, IT is critical and indispensable and some technology vendors see themselves as crucial and indispensable. Depending on market insight, experience, conviction, and budget, some tech products may be considered inevitable. The first widely used operating system, other well-known database, widely accepted productivity package, but also those large SaaS and other popular cloud.
The wisdom of my destiny
The old wisdom that’s still valid in IT is that no one has ever been fired for choosing “the great supplier du jour”. This statement originally referred to IBM, which was large and almost inevitable in the 1970s and 1980s. This tech giant was originally the default choice for IT managers. Then, in the ’90s, judgment hit Microsoft. But in some areas of IT, many other well-known technology vendors – and cloud service providers nowadays – can also be combined with this killer wisdom.
Consider, for example, Oracle for databases, SAP for ERP (enterprise resource management), IBM’s Red Hat for enterprise Linux, VMware for virtualization, Google for SaaS (Software-as-a-Service), AWS for the cloud, Salesforce for CRM (Customer Relationship Management). But don’t forget Microsoft Azure also for SaaS, Oracle, SAP, IBM as well as the “usual suspects” for some of the same IT areas mentioned above.
The crucial point is the starting point, the starting point: which technical resource did your organization choose – perhaps in the distant past? How do agreements and relationships arise? In terms of marketing, IT suppliers have for years gone beyond the level of a mere supplier. They are the strategic IT partner for the client. Excuse me: from the partner on the receding side. In practice, despite this positive message, there may still be obstacles, linkages, incompatibilities, and lack of migration options.
Makes sense, because business interests are, of course, involved. On both sides of the relationship in addition also between the different horses that pull the cart in the fast-moving market. If this is already a bit difficult with Biga (two in hand) or Quadriga (four in hand), then the complex world of IT has many horses that sometimes want to go in different directions.
whips for horses;
As Ben-Hur, the IT manager or CIO has the challenging task of putting all the horses in the right direction and driving them to higher speeds. And just as with real horse racing, there are possible, desirable, ideal, and utopian means to be used for it. Unlike real races, horses can not only struggle, but fight back with their whip. or threaten to do so.
Such a whip is then, for example, the contractual possibility of revision. Does the customer or strategic partner pay for everything the organization uses? Are the IT resources provided being properly used? Many organizations do not have IT asset management in order and a dreaded audit can reveal unexpected usage and create significant cost items.
This is why the CIO platform stipulates that the scope, implementation, and intended outcome of the audit must be clearly defined. In the contract between the technology supplier and the customer. This seemingly open door is really a much needed point on what agreements need to be made.
Monitoring the correct use of the software and its licenses is a legitimate right of suppliers, as stated by the Dutch Association of IT Managers. But there are also risks for the customer. For example, when suppliers have an additional goal of selling more new licenses, products, or services. Or when suppliers want to pressure customers to move to a new platform or business model.
The Point of Agreements on Audits is the eleventh and final one on the list of “fair principles” drawn up by the CIO platform. These eleven principles are not only aimed at improving supplier management. The organization also positions these pooled ideas as a key way to unleash Europe’s digital potential. The European Commission (EC) has already approached the European Commission with this argument to curb mostly American suppliers.
The second principle can be seen as a desirable or even utopian contraption for the horse driver: Suppliers will not create technical or commercial locks. The reality is different and the chances are slim that this will really change. Tweaks seem possible, as evidenced by Microsoft’s recent concessions to use the cloud, though those changes have also received criticism.
The third principle is the critical issue of data and its control: Customers will remain in control of their own data, as well as all data uploaded or processed by the purchased service or IT solution. This is also a matter of signing into the agreement with the supplier, which is again easier said than done. Hence the fourth principle: contractual terms and conditions must be clear and unambiguous. With the important follow-up sentence: It will not be unilaterally changeable.
The fifth principle is somewhat geared toward the modern world of cloud computing and outsourcing, but is fundamentally broadly applicable: Contractual terms will not restrict — or discriminate against — customers’ choice of cloud providers, outsourcing partners, or hardware platforms. A technology supplier that nonetheless makes such requirements actually shows its true intent: locking.
Principle Six also focuses on the cloud: licenses and subscriptions will be free of geographic and entity restrictions. Contracts may contain provisions suspending the use of technology if, for example, a customer moves, expands its activities to another country, makes an acquisition, undertakes a merger, or undergoes a reorganization.
As described earlier, suppliers can pressure customers to conform to new products, technologies, or business models, but the reverse is also possible; So hold back. The CIO’s seventh “fair principle” addresses this: contractual terms will allow customers to use advanced or innovative technologies and deployment models.
The licensing issue that affected SAP users a few years ago is a painful example. The indirect use of SAP back-end software has suddenly confronted customers with impending additional costs. After shock, payments, disruption, resistance, and even lawsuits, improvement was promised and clarity was created. However, a thorough understanding of the contracts with technology suppliers is and continues to be essential.
SLA theory versus practice
What also matters is the customer’s practical situation. In addition to the terms of the license, the subtleties of service level agreements (service level agreements) can also play a role. Principle 8 takes this into account: service levels and product specifications will be explicitly defined taking into account the customer context. A situation where the application is not effectively usable due to a slow network can satisfy the SLA. But this does not benefit the client.
Principles 9 and 10 deal with the business models used by suppliers. These can convert, for example from OpEx to CapEx; One-time purchase of a technology product against monthly payments. Principle 9 prohibits unilateral changes and applies strict adherence to changes. Principle Ten requires consistency and reasonableness of business models and what is offered along them. In addition to the prohibition of combining different models, which only leads to an increase in the turnover of the resource.
These ground rules can be hard to grasp. Especially when the horses are already harnessed and the cart is in full swing on the hot sands of the fast-paced, technology-driven market. However, changing the horse in the meantime can provide more speed or agility. So win the race? The result is a matter of good leadership.