Technology executives face an age-old dilemma when it comes to tech services partners: They need partners that can help with business and customer solutions, that have strong relationships with relevant industry providers, and that can align with their company’s core values and culture. Tech executives also need the old standbys from their partners: Bring more knowledge, more speed, and more resources to manage cost. But understanding and leveraging the changing dynamics in the tech services landscape is not so simple, as they define their partner strategy by answering core questions such as: When is the right time to bring in a partner, and what platform landscapes are in scope? What’s the skill demand, and how many partners are needed? What constitutes success?
Here are a few critical considerations to help tech execs attempt to resolve the classic service-partner dilemma:
- Knowledge and speed are delivered through software-powered services. PowerPoint pitches may never die, but your evaluation of potential services partners should evolve to in part mimic software evaluations — including demos and proofs of concept. Combined with armies of people, your services partners come to the table with a wide range of software assets from micro industry app extensions to data migration tools.
- Prioritization of skills naturally evolves. Speaking of armies of people, it’s no longer about ABAP (Advanced Business Application Programming) developers or counting the minutes you see consultants in chairs. An obvious shift is that the types of skills that are most in demand are not ABAP developers and mainframe experts. Data scientists, change management experts, and next-gen enterprise resource planning specialists are all in high demand, with varying degrees of availability. Beyond the skills, the collaboration of working with the people side of services delivery is another example of the pendulum swinging. While offshore value propositions hold, we see tech execs prioritizing nearshore, onshore, and on-site delivery models driven by the pandemic and value-based relationships.
- Value is measured in terms of value delivered, not deliverables. Time and materials and fixed-price contracts still dominate in services delivery models, but the shift to more outcome-oriented relationships is underway. Tech execs must play a larger role in the management of these relationships to define what value is expected of strategic partners over the long term and at the project level, what metrics will be used, and how risk/reward will be shared. The financial and legal terms are no small feat, but the primary driver of values-based relationships is trust, which tech execs must build the skills to assess and foster.
For more information about the basics, leading conversations, and where tech execs get involved in technology services decisions, Forrester clients can access the full report, Executive Guide 2022: Technology Services. If you would like to hear more on the topic, please reach out and schedule an inquiry (firstname.lastname@example.org).