Kevin McIsaac

Kevin McIsaac

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Conclusion: IBRS strongly believes that Australian Mid Sized organisations must begin to actively manage their dealings with their business partners, suppliers and customers. At the same time, they must deal with staffing and budgets that are not keeping pace with the ever-growing requirements of their IT infrastructures. A top priority must be to find ways to decrease the total cost of ownership of IT infrastructures and to minimise staffing requirements. Being able to consistently select the right vendors and products will be essential to achieving this goal.

Many of our clients report that they are not satisfied with the relationships that they have with the IT vendors and consultants they have selected. Poor post-purchase relationship management seems to be as much to blame as actual selection and negotiation process.


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Related Articles:

"The Case for a Vendor Management Process Part 2: The Process" IBRS, 2004-05-28 00:00:00

Small and midsize companies have, so far, mostly postponed investment in CRM solutions because of their complexity, their cost and dubious return on investment. Now, with Microsoft in the fray alongside Salesforce.com and others like them with their online deployment models, SME''s have a better range from which to choose and should be planning how they can take advantage of more affordable solutions

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The worldwide recession in IT spending is, by most accounts, about to end. However, our discussions with technology buyers show that the demands to ‘squeeze more out of less’ are still common. With most IT budgets forecast to show percentage growth only in the single digit range, demonstrable ROI from new IT initiatives is essential.

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Usage patterns will be different in every organisation, but the number and size of messages will continue to increase. It is important to watch for shifts in the technology that will help an organisation absorb more data with greater ease. Most of all, it is critical to understand how changes in the business, the technical capabilities of users or their correspondents, marketing plans or external events might create growth spurts or spikes in message size or volume.

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Conclusion: Linux has its place(s) in the SME organisation now, and clear evidence for reduced cost can be demonstrated. However, in more complex environments, the costs of commodity hardware and operating systems are small compared to the costs of ISV software and support and the use of Linux will be harder to warrant before 2005. Linux and other open source software offerings need to be evaluated rigorously before committing your organisations directions this way, as the vendor hype does not yet match reality for the SME.


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Software licence compliance is something that many will have to achieve during 2004. The risk of a licence audit by any of your software vendors has increased greatly during the last 6 months; many audits have been done and a high proportion of those auditees have found themselves to be in violation of their agreements. It’s time to consider your position and plan a course of action.


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In most businesses, regardless of size or industry, formal business continuity and/or disaster recovery planning is consistently under-funded and generally neglected by management. The business risks associated with this attitude can be very high but are not understood. Those plans that are in place simply don’t work. This is not surprising since disaster recovery hasn''t been given sufficient consideration, ensuring that plans are rarely tested (if ever) and equally rarely updated to reflect changes in process, technology or applications. In an emergency, there are many continuity requirements within an organisation’s business and services covering processes, facilities, and personnel. IT and a range of business units across the whole organisation must work together, both in planning for continuity and in its execution.

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While the intense competition in the PC market has benefited technology buyers in the form of lower capital costs, it has forced vendors into tighter product cycles and a frantic pace of incremental technological advancements with high-perceived but little real value to users. Corporate technology buyers of both desktop and laptop systems should focus efforts on achieving within their PC fleet a balance of meaningful technological aggressiveness and stability. They should also be increasingly vigilant in their assessment of the benefits of new technologies. Those organisations that do not take steps to understand vendor product transition processes and assess the impact on support will quickly develop a more complex mix of installed PCs than necessary. Escalating costs (driven by the uncontrolled installation of poorly understood technologies) will also be become a concern.

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More than half of all IT projects do not deliver the expected benefits. This is a metric that CEOs do not want to hear in these days of executive dissatisfaction with IT investment performance, and it is the CIO that is called to explain.

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IM represents a new tool for business communication and collaboration – additional to the traditional forms of communication, particularly e-mail and voice. Paradoxically, IM is the personal communication of the impersonal digital world, and as such it requires its own unique set of corporate IM guidelines.

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Since the IT industry continues to consolidate, with acquisitions of both large and small companies a weekly event, users must keep several questions and action items in mind to respond effectively if and when one of their main suppliers is suddenly acquired. It is important to remember that all acquisitions are takeovers – there is no such thing as a friendly merger – and if you are a customer of the acquiree you have to be extra diligent.

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The scarcity of skilled in-house IT staff and strong project managers in Medium Enterprises is increasingly leading to the use of multiple outsourcers for major projects. However, poor selection and inadequate management of the relationships with the outsourcers that occurs through the lack of project management and outsourcing management skills are critical factors contributing to IT project failure. A disciplined approach is required to enhance the success rate of IT projects. The most important thing that a CIO can do is to ensure that the business managers understand the goals of the outsourcing and the impact on business operations.

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IT cost recovery is viewed as a necessary part of establishing a clear service relationship with business units, but by itself it will not reduce costs or increase efficiency. In fact the worst cost recovery systems, with IT-centric cost algorithms, reinforce the image of IT as a techno-jungle with no concept of business value, dealing in “funny money” (what do I get for a CPU second?). Misinterpretation of fixed versus variable costs can also lead to faulty decision-making.

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Procurement of PCs, software, servers or services can seem overwhelming due to the complexity inherent in the process, market and business volatility, and uncertainty in the vendor community. Buyers should use a formal process - including the establishment of documented best practices and standard document templates - tailored to that organisation’s culture and structure to bring discipline to the process. Ultimately such an approach will reduce TCO. A successful negotiation requires a complete understanding of the product or service, how it will be used, user profiles, and identification of vendor negotiating levers.

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