Contract review and willingness to renegotiate with suppliers pivotal to aligning IT to business needs, says expert

Specialist in dispute resolution in the ICT sector David Barker of Pinsent Masons, the law firm behind Out-Law.com, said that potential conflicts will arise with suppliers if the misalignment of business needs and the provision of IT services is allowed to drift.

"If poor alignment is not tackled promptly you can reach a point where relationships between businesses, the in-house IT community and third party suppliers become extremely strained," Barker said.

Barker was commenting after a survey conducted by Cisco revealed that many organisations are experiencing problems with the alignment of their business needs and how their in-house IT teams operate and are utilised.

Although "IT and business leaders are working more closely together than ever before ", 76% of the 1,300 IT decision makers surveyed said that "business leaders and other non-IT teams roll out new applications without engaging IT either 'all the time' or 'sometimes'", the Cisco Global IT Impact Survey (67-page / 9.42MB PDF) report said.

More than a third (38%) of respondents also said that they "are brought into the planning and deployment process late", whilst many raised concern that their business' networks were not ready for moving applications to the cloud, adopting the 'bring your own device' (BYOD) approach to doing business, or for data centre consolidation or virtualisation.

Barker said that aligning IT to business needs was just as important when businesses engage with third-party suppliers. He said IT buyers must keep outsourcing contracts under review and be ready to renegotiate the terms of their deals with suppliers to maintain good alignment and avoid conflicts.

"IT is ever-changing and the business demands will change both in terms of what the business wants and needs, such as technological advancement and scale," Barker said. "In addition, the economic conditions have created a situation where businesses have shrunk or consolidated their operations and the result can be that IT services no longer work for them."

"If contracts have been drafted in customers' favour, there may be a chance to renegotiate agreements unilaterally but in other scenarios it can be more difficult to get suppliers to agree that change is necessary, particularly where change would impact on their revenues and profits. Commonly, however, there will also be performance issues that give customers leverage to alter contracts," he said.

Barker said that the most effective renegotiations involve suppliers and customers to finding 'win-win' solutions. "This may involve going back to the drawing board and deciding whether they can re-scope a deal that works for both of them. An example may be where more technologically advanced services are offered to customers, such as cloud-based storage and software applications, which can be economical for both parties," the expert said.  "These technologies may not have been available at the time of the original deal."

"A contract renegotiation can also allow businesses and suppliers to iron out other problems and differences they may have, such as claims of  breach of contract, service credits owed or what metrics the suppliers use to measure the deliverance of their services," Barker added.