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In early April, TEKsystems hosted 21 customers during the 10th annual Masters Customer Council event in Augusta, Ga. Customers representing Network Services, ERP Support Services and Global Services attended roundtable discussions focused on key trends affecting their organizations. TEKsystems’ executive and marketing hosts moderated the discussions while attendees collaborated on their future strategies and the day-to-day operations within their organizations. This dialogue provided an avenue for TEKsystems to better understand the business and IT issues customers currently face, enabling us to become a more valuable partner.
The customer council sessions covered three themes:
Gartner highlighted analytics, mobile technologies and cloud computing as the top three areas of increased spending for CIOs in 2013. Each of these areas presents security challenges on a scale most organizations have not faced to date.
When asked what their main security and risk management challenges from a business perspective are, clients prioritized an inability to recruit the right people into their teams as well as difficulty in measuring ROI for their security spend, indicating that either they or their vendors do not have those models in place. Additionally, many struggle with staying ahead of the security curve strategically. As one client stated: “Our tactical security efforts take too much time, which detracts from our ability to approach security strategically. I feel like I’m treading water and not getting closer to shore.” Operationally, almost all mentioned BYOD (bring your own device), compliance authentification and vulnerability management as the greatest hurdles they will face in the coming years.
Interestingly, not a single client mentioned struggling to secure security-related budget, indicating that many companies have moved beyond needing to justify that expense and are now trying to build effective security measures into their organizational fabric. Digging further into how they will allocate their budget this year, security leaders revealed that roughly 40 percent will go towards staff augmentation support. In aggregate, 35 percent will be spent on either maintaining and upgrading existing or investing in new on-premise security technology. Despite the significant challenges they face, security leaders indicated that they are looking to utilize only 5 percent of their budget on managed services or other forms of outsourcing such as SaaS.
Those that are going the outsourcing route indicated several drivers for this decision. Over 75 percent noted that external partners enable speed-to-implementation they otherwise would not be able to deliver, while half identified lack of bandwidth. Many also mentioned that their limited understanding of security solutions motivated them to choose external partnerships. When asked what kind of outsourcing vendor partnerships they look for, all mentioned vendor security expertise as well as vendor access to required skill sets and resources. As one client stated, “partnership here is critical. When we don’t have institutional knowledge, we need a vendor to school us up quickly and actively transfer that know-how to us so we can absorb it. You can’t just walk in the door, lay down some code and then walk out.”
Our tactical security efforts take too much time, which detracts from our ability to approach security strategically.
ERP systems lie at the core of almost all organizations. TEKsystems explored three distinct areas that clients have increasingly highlighted in customer interactions – the value of a dedicated vendor ERP bench of talent, the value of vendors having strong relationships with OEMs to improve customer support as well as the impact that SaaS/Cloud is having on ERP-related outsourcing.
Some ERP vendors tout having a bench of available ERP-focused resources as a differentiator. In exploring this further, clients provided interesting perspectives. “I am most interested in getting quality resources from my vendors. I don’t care how my vendors access them. Many of the resources I’ve received ‘off the bench’ haven’t been very good.” Another brought up the nomadic nature of high-end ERP consultants. “Let’s face it—the good ones can name their price, on their own terms. I almost have to wonder whether the people I get off a true bench simply weren’t good enough to hack it as freelancers.” Clients tended to agree that a bench was interesting only in a capacity (‘we need more of a lower-level skill set to get through a project burst’) vs. experience (‘we require a senior consultant with 10+ years of project experience in our industry’) equation, but generally speaking, it provided them only with first-available vs. best-available talent.
Many vendors also tout that, through their partnership with the OEM, they have a tie in to product support that other vendors do not, which in theory should serve as an escalation point and insurance policy. Said one IT director, “in my experience, those who have that partnership are treated no differently than any persistent customer would be.” Most clients were skeptical about these perceived benefits and had not experienced enough upside to this differentiator to actively seek it out in their ERP services vendors. Another client added that “unless a vendor can prove to have strong ties into the R&D group of the OEM, it’s just vaporwar to me.”
Regarding the trend of outsourcing to the Cloud or via SaaS, almost all clients remain skeptical about the model as a wholesale solution to their ERP needs. Those that are availing themselves of the option are doing so by selecting discrete, non-critical functionalities as pilot projects to test the model. While most said they see themselves increasing their Cloud/SaaS outsourcing in the future, there are significant roadblocks that prevent them from considering it a cure-all. Stated the IT director for a large, multinational bank: “We are a global company; laws that apply here in the U.S. are totally different elsewhere. For example, data privacy rules for Denmark stopped us in our tracks for six months.” Another client mentioned that due to their activities across 52 countries, cost and implementation strategy means they are taking a 100 percent on-premise approach. While the hype behind this ERP service model is strong, it is equally clear that its mainstream adoption lies many years in the future.
All attendees agreed that strategic partnerships never happen without a baseline of mutual trust and a track record of reliability. “In my mind, our best vendors are an extension of our company. We’re all in this thing together.”
Where we have adopted cloud solutions, there’s been a nice long list of things that went very, very wrong.
Since the advent of outsourcing as a strategic concept in the mid-1980s, organizations have struggled to optimize how to engage third-party vendors in a way that supports their specific needs as well as adjust that model over time as their markets change. TEKsystems leadership honed in on several issues raised in the council—what they consider to be the most effective vendor IT delivery model, what their greatest current challenges are and how they differentiate between tactical and strategic vendor partnerships. Clients agreed that there is no one ideal delivery model. “I have to look at this from a project-to-project basis, and our needs are different from one to the next. And that dictates the engagement model we want for that specific project,” said one IT director. Many stratify their vendors by categorizing them in terms of the complexity they can manage, and thus strategic value they provide, with staff augmentation on one side and deliverables-based outsourcing on the other. Depending on the maturity of an organization’s vendor management operations, this categorization can lead to a glut of vendors and a lack of oversight for them. One CFO mentioned a hybrid model as ideal, in which a small number of strategic vendors who have invested in understanding their business needs and who possess several engagement options help their organization decide which delivery model is best suited to a particular need.
Clients were very clear regarding what they desired from vendors—they want partners who understand their business and who can bring in expertise to make it better. One Chief Information Officer mentioned: “It’s no longer a question of whether or not to outsource, hasn’t been for years. The question now is how, and to whom? Our world has never been more complex—we need partners who will walk with us and who we can learn from.” Clients value the outside-in perspective that an outsourcing partner can provide, be it in sharing thought leadership or assisting them in developing the strategies necessary to combat existing challenges. In the words of an IT director, “the most important thing I demand from my strategic vendors is that they learn my business and then, given their expertise, assist me in developing the solutions that fit my specific needs. Everything else is tactical.” It is clear that given the intricate ecosystem of business and IT, companies are actively seeking vendors who come alongside them, invest in understanding the nuances of their organization and then offer solutions that are tailored to their needs.
The 2013 Masters Customer Council represented an opportunity for a select group of customers from various industries to network and discuss shared business challenges. Not only did TEKsystems bolster our understanding of current customer challenges, we also had the opportunity to build stronger relationships with our clients.