it sourcing best practices - doa homeit product •perpetual software •upfront purchase that can...
TRANSCRIPT
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IT Sourcing Best Practices& The Basic Rules that
Go Along with It
2019 Wisconsin Statewide Procurement Conference: Procurement in Partnership1
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Introduction • Ceotrid Gilbert: IT Acquisitions Consultant
• Matt Limoges: IT Sourcing Section Chief
2019 Wisconsin Statewide Procurement Conference: Procurement in Partnership2
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Goals of Today
• Determine what IT is
• Calm the scare factor
• Establish some basic rules of IT procurement
• Provide resources for IT procurement
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What isInformation Technology?
EVERYTHING!
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Calm the Scare Factor
IT is everywhere.
It touches everything we do…
So why are people so afraid of it?
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Basic Rulesof IT Procurement
• Rule #1: Do not be intimidated
• Rule #2: Determine what the data is and what protections you need to build into the deal
• Rule #3: Ask Questions
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Basic Rulesof IT Procurement
Rule #1: Do not be Intimidated
• How many of us have had a conversation with a technical resource that went like this:
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IT Product
• Perpetual Software
• Upfront purchase that can benefit the user for a specific amount of time
• Requires maintenance to make sure the software is up to date and at its most useful
Non-IT Analogy
• Shovel
• Dig it?
• Upfront purchase that can benefit the user, until the shovel breaks
• Requires maintenance to sharpen the blade, replace the handle, etc.
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Rule #1: Do Not Be Intimidated
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IT Product
• Subscription Software
• Recurring cost for something useful
• Maintenance is often built into the cost
• Once you cancel the subscription you have no asset
Non-IT Analogy
• Car Lease
• Recurring cost for something useful
• Maintenance is often built into the cost
• If you miss a lease payment, or want to go get a different car, there is no asset to offload
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Rule #1: Do Not Be Intimidated
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IT Term
• Service Level Agreement
• IT Service is required to have a certain amount of uptime or quality
Non-IT Analogy
• Lawn Mowing Service
• If lawn is not mowed…
• We don’t pay
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Rule #1: Do Not Be Intimidated
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IT Term
• Data
• Okay…
• Let’s talk about data
Non-IT Analogy
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Rule #1: Do Not Be Intimidated
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Rule #2:
Determine what the data is and what protections you need to build into the deal
• What is data and what are people doing with it?
• Why do we care about data?
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Rule #2:
Determine what the data is and what protections you need to build into the deal
• Know the data involved in the deal
• Authorized data actions:
• Access
• Use
• Store
• Process
• Transmit
• Sensitive or non-sensitive
• Business risk of loss
• Unauthorized data actions
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Rule #2:
Determine what the data is and what protections you need to build into the deal
Prevent
• Sequester sensitive vs. non-sensitive data
• Ensure solutions meet minimum security requirements
• Agencies have their own Chief Information Security Officers (CISOs)
• Require companies to meet minimum security requirements based on the type of data in question
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Rule #2:
Determine what the data is and what protections you need to build into the deal
Protect
• Build financial considerations into the document in the event of a breach
• Liquidated Damages
• Per line of data, you owe us $$$
• Ensure the proper level of cyber-liability insurance is carried by your suppliers
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Rule #2:
Determine what the data is and what protections you need to build into the deal
• Bring the data home
• We want our data!
• Tell the timeline in which data will be returned and what format it will be returned in
• What can your data do for you?
• Help transition into the next contract
• Better inform your next contract decisions
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Rule #3:
Ask Questions!
• Forest through the trees
• Technical staff get so focused on the details surrounding their work they sometimes overlook basic considerations of the contract
• Example:
• Physical considerations requiring additional seating for the contracted staff
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Rule #3:
Ask Questions!
• What is your 30-second description of what you are procuring?
• Who
• What
• Where
• When
• Why
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Rule #3:
Ask Questions!
• Focus your questions on the things that the procurement function deals with:
• Right price
• Right time
• Right product
• What does acceptance look like?
• What does success look like?
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Payment Structure
Time and Materials
Example: Staff augmentation, paid hourly
• Pros: Pay for what you use
• Cons:
• Requires additional management to ensure time is not being abused
Deliverables-Based Payments
Example: System implementation with milestones
• Pros: Pay for what is done, when it is done
• Cons:
• Contractors do not like this arrangement
• What happens if the milestones don’t make a solid system?
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Rule #3: Ask Questions!
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Rule #3: • What type of license?
• Workstation
• Concurrent use
• Site/Enterprise
• Volume
• Server (network)
• Seat
• Processor
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Resources to Move Forward
• PRO-508, Information Technology (IT) and Telecommunications Procurements
• Enterprise IT Sourcing Staff
• Division of Enterprise Technology Staff
• VendorNet
• When in doubt, there is probably a contract that covers what you need
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Wrap Up • IT is Everywhere
• IT is Everything
• Basic Rules of IT Procurement:
• Rule #1: Do not be intimidated
• Rule #2: Determine what the data is and what protections you need to build into the deal
• Rule #3: Ask questions!
• Available Resources
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Questions?Or have you already broken Rule #3?
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