Technology distribution channels: understanding and managing channels to market by Julian Dent

Author:Julian Dent
Language: eng
Format: epub
Publisher: Kogan Page Limited

Most service providers can cite a number of projects in their history which have become legends for the number of disasters that accumulated and resulted in a low or even negative recoverability. There have been a number of IT projects for the public sector in the UK that became so bad that the service provider was terminated or made to pay penalty payments for missing deadlines or delivering systems that provided only a fraction of the functionality promised in the original contract specification.

Where service providers often lose out on recoverability is on the grey areas where the customer has changed the specification along the way, often for good business reasons, but the cost of which has not been flagged by the service provider. An example is when the contract period is stretched out, through non-availability of the customer’s own resources. This means that the service provider is on the contract for longer and almost always has to commit more resources, even if they are stretched out and scaled down over the longer time period. The increased amount of ‘put down and pick up’ work incurs resources. However, it is often difficult to tie this type of issue down in contracts and usually the service provider takes a hit on recoverability as a result. This is often down to the relative power in the relationship between the customer and the service provider. Many large corporate and public sector customers have learnt to hold the promise of future work or threat of loss of future work as a double-edged sword to the throat of the service provider. This erodes the service provider’s ability to fully price the cost of ‘change orders’ or scope increases, and thus their recoverability.

People-based value delivery – manage people

Managing people is not a simple numbers game. People are tough to manage, and expect their managers to pay attention to the variety and mix of their work experience, work/life balance, morale, training and development and offer them career progression, etc. In many ways the demands of the people responsible for delivering the services are at odds with the demands of the customer and even that of the service provider itself (Figure 13.5).

FIGURE 13.5 Conflicting expectations of the service provider’s stakeholders

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