Flexibility and speed of delivery were other major considerations for IT. Nimble solution providers which are able customise their solutions to meet an enterprise's requirements and implement their services quickly had an advantage.
Ng pointed out that while F&N were confident in the services provided by their long-standing business partners, they were also keen to work with others. "Stable core systems are important. However, we are also open to the value-added capabilities and solution architecture which are offered by smaller vendors. They have suggested creative solutions which suit our needs. We also keen to explore cloud offerings further. Cloud has had its failures but it has also had its successes."
She continued: "Our IT organisation does not want to spend too much time and resources solving complexities. We want to keep things simple, remove these complexities, park it with reputable vendors and focus on providing the innovation the business is seeking."
A flexible cost structure is another advantage third-party solution providers have provided. "They have provided cost structures with more predictable cost and fewer variables which appeal to management," said Ng.
Enterprises are willing to invest in systems which can accelerate business processes if these systems provided value in return. In assessing costs, enterprises took into consideration all costs including the cost structure, cost of maintenance, enhancements, scalability and the long-term viability of the vendor offering the solution.
"When new functionalities are added, cost is an issue. Service providers which use a cost structure based on licensing fees is disadvantaged as enterprises are seeking ways to be more cost-effective," said Chew. "These new functionalities may be only used by a small number of people within the enterprise. Cost becomes expensive if it is pegged to the number of licenses instead of the number of users. We have had to reconsider and reject projects because of these costing restrictions. The resulting costs would have exceeded any value the new functions would have provided."
"With the cloud, there is more flexibility in pricing. More solution providers are now using the pay-as-you-use pricing model," he said. "There is a danger that providers which continue with the licensing fee model will price themselves out of the market."
The effectiveness of solutions must also be visible to management and end-users. Too often, the capabilities of IT solutions have been transparent unless a problem occurred. Whilst management may not care about the complexities of IT, it is to IT vendors' advantage to ensure that management is aware of the benefits resulting from IT investment. Thus, it was important for solution providers to show the significance of the contribution of its services at the front-end as well as at the back-end.
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