Insight

Commercial Insight: Which systems integrator should you engage for your project implementation and what is the best delivery model?

Insight

Systems Integrator

How a robust selection process helped Simile to successfully choose a systems integrator (SI) partner

*Protecting our clients’ confidence is of utmost importance at ITAA. While our case studies are based on true projects, we have used fictitious names and removed or changed other identifiable details.

Background

Our client, Simile, was not used to working with systems integrator (SI) partners. However, they needed to implement significant IT software and were not sure they had the right in-house capability. But who to engage? Most integration projects above a certain size and time-frame need the input of an independent SI, but choosing between small and niche, and large with widespread knowledge, can be a challenge.

The Simile team were also still in the final stages of software selection, so they weren’t sure when to start considering SI choices, and whether they should do it directly or leave it to the software provider to decide.

In addition, they were concerned about asking a third party to deliver their key project and wanted them to guarantee delivery. How would the responsibilities of the various parties (Simile, the software provider and the SI) be decided, and what was the best relationship model to implement?

Our approach

Step 1: Requirements and market analysis

Determining the scope and scale of implementation will always influence the market segment that is considered. As the decision on the final software selection was still pending, it was clear that we needed a request for information (RFI) to flush out capabilities and approaches across the market place, and understand Simile’s options before issuing a detailed request for proposal (RFP).

When choosing to work with two partners that can heavily influence the project, it is important to identify any partnerships that operate better than others. Our recommendation was to engage the possible systems integrator partners alongside the software selection process so Simile could consider all options up front. Some SI partners could operate across both software vendors, which gave us the opportunity to discuss pitfalls and benefits previously seen in implementing both software options, and feed this into the software selection process.

From the RFI responses, we were able to build up a clear picture of the culture, size, experience and delivery approach of each of the providers. Key considerations of the possible implementation models were:

  • Should Simile prime and manage both the software vendor and the SI partner?
  • Should Simile make the software vendor prime and ask them to manage the SI partner?
  • Should the SI partner be the prime and manage the software vendor?

It was also possible to explore with the software providers if they had a partner or model preference and hear about their positive or negative experiences.

Step 2: Request for proposal

Once the RFI had been completed, the team turned its attention to getting internal approval for the software vendor decision, alongside developing and issuing the RFP. The appropriate panel of SI partners was engaged in the RFP process, in the knowledge that they would be a good fit with the software provider, as confirmed at the RFI stage.  The client still had three possible options and the software provider had stated they were neutral to the outcome of the RFP, removing this risk up front.

Simile had also established that they should prime and manage each of the suppliers directly. Talking to all the parties up front, we clearly identified roles and responsibilities that would require close client engagement. In particular, Simile would be held accountable for the business-critical configuration decisions to implement the new software.

The systems integrator role was more focused on business change and integration than software delivery. By clarifying this at the RFI stage, we could include a clear set of requirements in the RFP, leading to a quicker and more efficient selection process. It also meant we were able to recommend a supplier shortly after confirming the software provider.

We worked with the Simile team and the suppliers at this stage to decide the correct commercial model. Long fixed-price projects for the end to end delivery are not necessarily the best outcome, as the risk margin increases as the pricing stretches into the future. We negotiated a fixed price in the initial stage with capped rate cards and agreed up-front discounts for future statements of work to manage cost surety and minimal risk margin as the project progressed with growing certainty.

Step 3: Contracting

In all supply relationships the contracting phase is key to ensure both parties are clear and agree on their obligations, liabilities, deliverables and governance. This is particularly imperative in a complex situation where more than one provider is involved with the obligations and governance aspects.

Robust contracting ensures that once in the implementation phase, all parties are clear on who is accountable and responsible for what, how that will be measured and reported and the governance surrounding the whole process. It is important to clearly identify interdependencies and risks in advance, including the dispute management process, and agree and document all needs from the outset.

We led the negotiations with all parties’ Commercial, Delivery and Legal teams to make sure that the obligations and liabilities were fit for purpose and that we covered all possible outcomes up front. All parties were incentivised to meet key deliverables, with milestone payments and liquidated damages on specified dates, and key personnel were identified as part of the contract commitment.

Step 4: Change management

With large implementations that span across more than one partner and long delivery time-frames, change is inevitable. This was also covered in the contract with processes and agreed governance – something that must be implemented from day one. Even if there is very little to discuss at that stage, establishing the right governance and ensuring all change is documented ensures success in later phases. By capturing and managing even the smallest changes, you set a baseline for larger and more complex changes that may come in the future. It also clearly articulates the start point of the ‘production’ relationship, when the project team hands over from implementation into BAU.

Results

Working with a cross-functional team and being engaged early in the process were key to supporting Simile to success. Taking the following approach helped choose the best supplier and develop a robust contract and governance model.

  • RFI – There are many possible pairings and model options when choosing a software vendor and systems integrator partner, but in this case, being engaged early allowed us to help Simile identify the optimal options and eliminate a number of risk factors before circulating the RFP.
  • Commercial construct – We were able to work with all parties to ensure the right commercial model which fixed costs up front and allowed flexibility as the project progressed. This was capped to provide Simile with cost surety and a known framework that avoided cost creep once the contract had been signed.
  • ContractingRobust contracts for all parties covered the possible risks and ensured clear roles and responsibilities. They clearly outlined all parties’ liabilities and obligations, interdependencies and the steps to take if they encountered any problems.
  • Governance and change – We worked with Simile, the software vendor and the SI to put in place a framework for managing the delivery and relationships from the outset. This contract must be a living document so all parties can regularly review the activities, deliverables and obligations. We also documented a change process which was integral to the governance process.

With this in place, we helped Simile retain control and visibility of their chosen partners and their performance, creating a real partnership and giving the project the best possible chance of a successful delivery.

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