business-value-internal-it-rfp

Most business goals’ primary motivation is to grow the business, to be more profitable business and to eliminate risk. In the previous blog post, we talked about the terms with which IT value can be defined: Revenue Impact, Cost Reduction and Risk Mitigation.  Now let’s look at how we can approach build or buy, internal vs outsource decisions based on I&O levers: connectivity, security and compliance, hardware and software, service support, service continuity, and management process.

Here we come back to RFP. An RFP is always based on a set of metrics. Nuvalo encourages clients to first focus on above the line metrics (Revenue Impact, Cost Reduction and Risk Mitigation), operational metrics will come later. Metrics examples: NPS, MTBF, transactions/hour, total uptime, latency, bandwidth utilization, unplanned downtime, instances/user, TTR, labor as % of budget, change failure rate, capacity utilization to plan, vulnerabilities remediated/period, etc.

Once you have shown a few meaningful IT contribution metrics that map directly to business goals, you have a solid basis for your RFP. My favorites are (but you may have your own, different IT contribution metrics):

  •  IT cost vs NPS across user buying cycle
  • IT cost to average revenue per customer per period (external workflows)
  • IT cost vs internal user satisfaction across operating chain  in a company (internal workflows)
  • IT as % of total budget to business agility/scalability – ratio and sensitivity to IT cost change

Give us these four IT contribution metrics for the past three years, and we will be able to structure your RFP as one-two-three. Remember, we are writing your RFP to external IT providers as if your internal IT department would be bidding for the job, too.

Once done with IT contribution to business metrics, we project the operational metrics for Infrastructure & Operations levers (connectivity, security and compliance, hardware and software, service support, service continuity, and management process). These are easily top of mind for an IT professional. While business operational requirements provide a helpful framework on one hand, on the other, Nuvalo provides clients with industry benchmarks: ranges, averages, what is optimum, what is solid but expensive, what is cheap but risky, what is great and emerging. Does it feel like your RFP is pretty much done? Nope, it’s not finished yet. There is another framework that Nuvalo uses while assisting clients with RFP for IT projects and to IT providers. It is called an OSI stack framework and we’ll talk more about it in our next post.