The strategic vision of an organization as it relates to its underlying technology infrastructure should be “to support and enhance business objectives with a robust, secure and standardized high-availability computing environment while keeping technology spending and support costs to a minimum,” says John Schertell, practice director of supply chain management at Pomeroy IT Solutions, Inc.
Outsourcing to a strategic partner enables an IT organization to focus its attention and budget dollars on delivering strategic applications to meet business objectives.
Smart Business asked Schertell about his vision for strategic sourcing.
What should that vision be?
To achieve strategic objectives, the environment must be planned, controlled and standardized with identified optimal refresh cycles for each type of technology. When implemented with defined, measured service levels for product requisition, approval, scheduling, delivery, installation and ongoing support, the result is lower total IT costs, improved end-user satisfaction and the desired environment is manifested.
The CFO, CEO and procurement management should be involved. Implementation of these initiatives is far more effective when the business stakeholders understand and support IT best practices.
Who determines best practices?
Industry organizations or consultants such as Gartner and Forrester determine best practices by studying IT organizations’ effectiveness and cost structure. ITIL (Information Technology Infrastructure Library) is a library of IT best practices maintained by the United Kingdom's Office of Government Commerce. Pomeroy has more than 25 years of experience in driving efficiencies through best practices for IT organizations and consequently lowering costs.
How do you recommend strategic handling of people and physical assets?
Strategically, the user community must be required to live inside IT-determined standards and provisioning guidelines. Management at all levels must be educated to, and then embrace, the concept that the lowest purchase cost does not always equate to the lowest total cost of acquisition and ownership. If an organization must absorb the many costs of planning and holding inventory, issuing multiple purchase orders, managing the configuration and deployment process, and supporting basic levels of infrastructure, its costs are much higher than just the purchase price.
Assets should be deployed with standard images and asset tracking tools. The refresh cycle should be determined at the beginning of the asset’s useful life and planned accordingly. Service levels for provisioning, repair, support and disposal should be defined, communicated and measured. Efficiencies and utilization of technical staff can be attained by working with a supplier that can leverage resources and best practices across multiple organizations. The focus of IT should be on delivering strategic value, not infrastructure.
What level of service should a firm expect?
Every organization is at a different stage in its evolution. Consequently, service levels should be set to reflect the needs of the organization. Volume commitments will also drive the ability of the supplier to design effective programs. A company with less-refined processes and procedures will need higher acquisition service levels [quick turnaround] than a more mature organization that has its new-hire process integrated into its IT provisioning system, allowing the supplier to have a view into the pipeline of requests. Assuming an organization has committed to a procurement contract at a fair profit margin for the supplier, has embraced product standards and has reasonable internal processes in place, it should expect to receive a fully configured and imaged server, desktop or laptop system within five or six business days from placement of order. Expedited freight or on-location inventory can result in three-day or even same-day deployment. Planning and coordinating deployment of equipment to meet the scheduled installation date is actually the better practice.
Midrange systems and Internetworking equipment are typically more project-oriented. They can be planned and scheduled on a predetermined schedule.
What are the cost considerations?
When organizations focus on the base price of a unit from an OEM, they do not see the full picture; there are other services that must be performed, either by internal IT staff or by a service organization, such as Pomeroy. Comparing all costs an organization will bear internally if purchasing direct from the OEM to the cost of services of a reseller/integrator will normally result in a lower total cost of acquisition from the latter.
Not only will service costs be less due to efficiencies and utilization of resources, but resellers can purchase from the OEM at the same or lower negotiated OEM pricing, and then leverage programs and incentives available only to authorized resellers, further driving prices down.
JOHN SCHERTELL is the practice director of supply chain management at Pomeroy IT Solutions, Inc. in Cincinnati. Reach him at (603) 498-1332.