Cloud-based technology is assuming its place in IT infrastructure and, with that, relieving IT of internal tech management responsibilities. Arguably, this can save time, but the tradeoff is those responsibilities don't go away with the cloud — they just get reinvented.
Instead of tracking the progress of an applications or a systems group, the CIO and other responsible IT leaders must now track cloud vendor performance, and ensure up front in contracts that they have enough leverage to perfect technology and performance shortfalls when they occur.
Vendor management is still a "learning area" for most IT pros and even IT execs; they have spent the majority of their careers with the technology directly under their thumbs, and it can take a while to get used to relinquishing this direct control to someone else. Vendor management also requires communications and professional management skills that weren't always needed for working with internal IT.
Here are the key management areas that IT leaders need to focus on when interacting with outsourcers and cloud-based providers.
1: Contract negotiation and proof of concept
You shouldn't just get a signed contract from an end user — you should have a front-row seat for any IT-related vendor negotiation. IT issues to address before contracts are signed include:
- service level agreements (SLAs), such as what the vendor's uptime and mean time to response and repair will be;
- the vendor's commitment to have a regular project point person assigned to the company;
- the division of labor or responsibility for performance-related issues and system upgrades; and
- the establishment of a proof-of-concept project that allows the business and IT to test and confirm the solution before a contract is signed.
Entry and exit strategies must be written into the contract. This is very important, because many vendors become uncooperative and even hostile when they realize that their services are being discontinued.
2: SLA monitoring and day-to-day project coordination
IT should ensure that meetings with outside service providers are held at least quarterly. In these meetings, SLAs and performance should be reviewed. If business conditions have changed that make it necessary to adjust vendor SLAs and metrics, it should be done at these meetings.
On a daily basis, IT should have a staff person that stays in touch with the vendor.
3: Communications to the user community
Communications should be coordinated so that end users aren't hearing one thing from the vendor and another thing from internal IT. If internal IT is being asked to manage the vendor relationship, IT should manage the communications and serve as the internal communications conduit.
4: Security and business process integration
End users who embrace cloud offerings to solve business issues are not necessarily aware of the process and technology integration issues, nor of the shared fabric of security and business rules that must be in place to assure that the cloud services provider enforces the same business rulesets. IT has to take care of this through joint project work with the vendor.
If you're doing business with a cloud services provider that has specialized applications and expertise, you expect the same expansions in business capability from that vendor as you expect from your own efforts. IT must work hand in hand with internal business users to ensure that the roadmap of functionality that the enterprise requires to support its business is also applied by its vendors.
Needed: Strong tech skills and people skills
When you bring all of these requirements together, IT needs staff that is strong in project management and people management skills, including but not limited to business requirements definition, contract negotiation skills, work management, and the not always pleasant discussions that must take place when parties fail to meet expectations. A strong project leader and vendor manager must also possess the technical savvy to understand what exactly is going wrong technically when projects or daily operations fall apart.
Without the technical ability to accompany polished communications and great people skills, the job is only half done.
Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President of Product Research and Software Development for Summit Information Systems, a computer software company; and Vice President of Strategic Planning and Technology at FSI International, a multinational manufacturing company in the semiconductor industry. Mary is a keynote speaker and has more than 1,000 articles, research studies, and technology publications in print.