New agile approach: How to halve the time and resources needed when buying IT systems

Read the article in Danish Computerworld here

A complex IT procurement for a private company typically takes between six to nine months. Read how to break out of the traditional framework, halve the process time and create valuable partnerships.

In uncertain times, when we are potentially looking at an economic recession, it is essential that the procurement phase of IT-related services provides good solutions at competitive prices.

The best way to ensure this is through partnerships with the right supplier - that is the art of creating the future. Knowing what makes the perfect partner.

With an agile approach to purchasing IT-related services, you do away with the traditional approach and get a much better and more needs-based solution.

At the same time, you ensure a closer, and therefore much more fruitful, partnership with your supplier, both during and after the conclusion of the contract.

And as a bonus, we have found that companies can reduce the total time and resource consumption in the IT procurement phase by as much as 50 percent.

What is the difference?

To understand how the agile approach improves the process, it is necessary to recognise the challenges of the traditional way of purchasing IT systems and services.

Traditionally, the company often prepares detailed requirements and then devises solutions for how their overall needs can be met.

Yet they often only think one-dimensionally, without assessing the supplier's standard deliveries, and most of the time the company expects the IT supplier to adapt its products to the requirements.

By embarking on a more agile and collaborative process, you move from a detailed requirements to a description of needs and associated 'user stories'.

This ensures a better and broader collaboration between the customer and the supplier, where you collaborate on a solution that both suits the customer's needs, but is also based on the supplier's standard offer, so that the solution can be achieved faster and potentially with higher quality and for a lower price.

That means you put your company under less pressure, and you create a closer partnership with the supplier.

When you prepare the solution together, you also get an indication of how you culturally fit together and whether the supplier can understand the business’ IT needs.

Better offers with customised solutions

When you apply an agile mindset to early interactions with the market, using value-creating activities such as workshops, demonstrations, dialogues with suppliers and co-creative tender processes, it’s inevitable that you will get a better offer with more customised solutions and fewer surprises in the long run.

The method and approach are well tested and have been continuously improved over many years.

In a traditional approach, many activities are run one after the other, where in an agile approach most of them run in parallel.

This means more intensified requirements on internal functions and resources, but also that you focus more on cooperation with suppliers and the amount of work does not vary dramatically over the period.

By making use of early and ongoing negotiations, with a focus on solution-oriented and legal clarifications as well as strategic decisions between the customer and the supplier, you ensure that at the end of this shortened process all that is left do is the commercial negotiations, plus some limited clarifications that can be processed in the final negotiation.

There are five main differences in this different approach:

Fewer suppliers: The accelerated approach requires fewer suppliers in the process, because in the initial phase the number of suppliers is narrowed based on the market, the supplier's competencies, solutions, and references.

Early and ongoing involvement of suppliers: Fast and ongoing involvement of suppliers rather than a long preparation time.

The offer is prepared as a combination of the supplier's standard solutions and customer needs using a common approach.

The evaluation and negotiations begin early: The evaluation starts early during workshops, where cultural matches and solution designs are included on an equal basis with the more traditional elements.

Contracts are fair and built on standard approaches: Discussions and clarifications about the contract run in parallel with workshops, to clear major challenges. As far as possible, the contract must be built on the basis of standards, and be created on an agreed and negotiated basis like the other elements in the workshops.

The resource requirement is more concentrated: This accelerated method has a more concentrated draw on resources at the beginning, due to the intensive nature of the process.

This is due to activities such as workshops and coordination with suppliers taking up a lot of time. Subsequent resource requirements are the same as those in traditional ways of contract negotiations.

The method is used by many companies for a wide range of IT purchases, and demonstrably saves both time and resources.