Last month, we solicited retail CIOs for advice on choosing professional service vendors. Here, we invited the comments of service providers themselves.
The column on page 12 of the December 2002 issue, entitled "Promises Made, Promises Broken," depicted a common plight of retail CIOs. The article was about retailers who hired vendors to implement or maintain IT projects and were left dissatisfied with the services they purchased. In the piece, retailers who had been let down by vendor service offerings gave some 'learn-from-our-mistakes' kind of advice. As you can imagine, the article caught the attention of vendors who sell professional services.
The reality is, most retailers are going to need IT help at one point or another. Most retail IT staffs don't have the manpower, expertise, or mobility to keep up with the rapid pace of technology, yet keeping up with technology is precisely what retailers need to do to compete. Vendors know this, and they've turned it into a market opportunity. Today, retailers can outsource an entire IT department or work with a single consultant to help with specific implementations, like a wireless infrastructure or new POS system. But, just as there are good hardware vendors and bad hardware vendors, there are good professional service providers and there are bad ones.
Retailers Must Do Their Homework
Interestingly, when faced with the notion that many retailers find vendors over-promise and under-deliver on services, NewBold's (Rocky Mt., VA) VP of Operations Charlie Walters is neither defensive nor surprised. "Many retailers are gun shy because they've been burned before," says Walters. "But if they do a little homework, the risk of getting burned is minimized." Walters says research into a service providers' credibility is the best thing a retailer can do to minimize its risk. "That requires checking references and seeing proven examples of the type of services they're looking for," he says. Talking to other retailers who have used the vendor's service will verify the abilities of the provider's staff and prove the provider's best practices have actually been practiced. Chuck Renfroe, professional services manager at NewBold, advises retailers to visit the service vendor's site. "Go there, see their facility for yourself. Get a feel for their commitment to you by talking to them. It's very important to find out on the front end what the real focus on professional services is within the organization," says Renfroe. "If you're going to use them for that line of service, it needs to be one of the heartbeats of the company. It can't be an afterthought."
Retailers who balk at professional services are also no surprise to Giovanni Gigliotti, director of marketing Americas, IBM Distribution Sector (White Plains, NY). "Retailers' perceptions that vendor professional service departments don't live up to their promises are too often well founded," he says. "Service providers need to be accountable for providing measurable results." Gigliotti says retailers can make sure potential service providers are accountable by checking financials, which will verify the health of the company and ensure it will be there to see the project through. He also advises hiring a company willing to assume some of the project's financial risk. "Variable billing, or fees tied directly to the benefit the customer is experiencing, will address dissatisfaction with the end result versus what was promised," he says. Retailers can prove dissatisfaction better if the results they are looking for are measurable, but qualitative results can also be assessed.
Strike An In-House/Outsourced Balance
Professional service providers admit that achieving balance between the duties of the retail IT department and the vendor can be tricky, and that balance varies widely based on the retailer's skill sets and manpower. Retailers need to carefully explain the intentions of their project and, with the help of the service provider, identify where the holes are. "When a retailer identifies something they can't do well, a service provider can often deploy the solution faster, cheaper, and better," says Walters. In a marketplace swarmed by creative applications like loyalty programs and hardware like customer-facing kiosks and wireless handhelds, there are a lot of things a retailer traditionally can't do well on its own. "These endeavors challenge retailers to very quickly pick up skills and deploy systems. Speed to market is so important, and the window of deployment opportunity is shrinking rapidly," says Gigliotti. "We're seeing IT departments asked to deliver on requests in time frames that are quite unattainable without previous expertise."
In the best-case scenario, your hardware and software vendor's break/fix services work hand-in-hand with your professional service provider's integration services. This ensures that maintenance work is done to the specifications of the original implementation. Of course, this is assuming you've achieved the best-case scenario of finding a professional service vendor you can play nicely with in the first place. In light of recent conversations with both retail IT executives and professional service providers, a retailer who shops around a bit shouldn't have too much trouble with that.