As an IT service vendor, and license reseller, SightLines Consulting spends a fair amount of time considering the IT services market and the best way to offer, quote, sell, measure, quantify and qualify IT services. Fellow Enterprise Irregular and guest weblogger Vinnie Mirchandani talks about the state of IT Service procurement in a recent post here. Vinnie makes the point that IT services are notoriously difficult to rationalize on the buy side, and he's right. My point is that IT services are just as difficult to rationalize on the sell side. Currently, SightLines offers IT services in two flavors: Fixed Bid when the scope of work is defined and per hour time and materials when the scope is vague or when the customer doesn't want to establish a scope. The Fixed Bid is easier to work under because it does not require exact time records for the client, and that's the problem. As the vendor we are never entirely certain how of if we are profitable. Sure, we can do a better job of managing hours, but that's not as easy said as done, especially in the Small and Medium Enterprise (SME) space where you have to work more than one project at a time. Project based Fixed Bids are also difficult for the client. One big number for the whole implementation does not provide a good handle on what they can expect from the implementation. The vendor pushes to finish while the client pulls back the implementation finish line. The client finds it hard to finally say the implementation is done and now we are going to take ownership. Likewise the vendor often tries to manage to time and budget without asking if the client is ready to take ownership, or what it will take to bring the project to successful conclusion. On the other hand, Hourly Time and Materials projects fix some of these problems but are not without their own issues. Instead of the vendor focusing too much on hours and not enough on the project's and client's progress, the client does; that is, the client ends up pouring over the hours consumed and fixating on the hours yet to be billed. Ultimately the project suffers. So what's the answer? Well, as in so many things, improvement is possible when you are NOT willing to let the perfect be the enemy of the good. Managing IT projects is like managing any long term relationship, there just has to be flexibility on both sides and the willingness to do more than just communicate needs - you have to listen too. We are not perfect in the listening part, and frankly neither are our clients. One of the problems is that when we enter into the contract we don't always have a heart to heart about what each of us expects, for fear of offending, I suppose. Then again, a heart to heart is not necessarily the fix for all that happens going forward. Apart from better communications, we have also implemented the fixed bid by module contract in most cases. What this means is that we bid an implementation module by module. If the client wants more in one module than they originally requested, then we can add to that module and keep within budget by lessening another module. We think it provides both us and the client with a means of adding some flexibility to project scope without constantly re-negotiating contracts. In the end, though both parties must see and understand the importance of the long term relationship. This is the best way to navigate in a sea of unknown and sometimes unknowable variables. | 
