Healthy competition

Monopoly breeds contempt. In my twelve year career to date, I’ve worked in a number of organisations, and this has often rung true.

Once the contract is signed and the sales effort is over, it’s often the case that the A-team goes off to the next sales venture, while you’re left with the B-team to deliver against the contract. And depending on the terms of that contract, there’s often complacency, the supplier safe in the knowledge that the contract allows them latitude and mediocrity, and is not designed with superlatives in mind.

There have been exceptions, but this seems to be the norm. It’s true of advertising and marketing in general, it’s true of the IT industry, and it’s true of both the private and public sectors, although the scale of contracts in the latter may make it more prone to abuse.

One of the primary reasons for the complacency is the lack of competition. The contract binds you to work with a certain supplier, and if you want that thing delivering, it’s often a binary decision you have to make: Yes/No.

It seems much more appealing to have two (or maybe more) suppliers, each working on equal terms. For any piece of work, you ask the suppliers to put forward their proposals, allowing you to choose and run with the most appealing one.

The Petronas Towers were built by two separate companies, each responsible for its own tower. Watching the documentary on their construction, I couldn’t help but feel that this competition was healthy. It inspired innovation, thinking outside of the box and going the extra mile.

Surely the same would be true if an organisation had more than one chosen IT provider. There would be additional effort put into the upfront define/design activities (now that multiple companies do this piece rather than just the one), but this drawback would be outweighed by the fact that prices would be competitive, levels of effort would be commensurate and solutions would be innovative.

Comments

3 Responses to “Healthy competition”

  1. Rob on August 12th, 2006 17:36

    Dan, most companies do have a choice of IT supplier, and true, when a new tender comes up they receive bids and suggested solutions from a number of parties.

    Trouble is that no matter which they choose, there will have invariably been lies and manipulation to win that sale and the ‘B Team’ as you say will be left to struggle with delivery.

    Of course, by the time the poor client has discovered chosen vendor ‘X’ cannot deliver on time/budget, vendor ‘Y’ is no longer an economic option so stick with ‘X’ they do, pay through the nose and accept quality problems and delays they must.

    If only all IT projects were like those twin towers, but construction of IT systems is very different to physical things.

    Normally when work on separate systems on the same project is divided between vendors ‘X’ and ‘Y’ both have delays and such. A precarious game of chicken will ensue, the looser being the one to admits to the client they will mess a deadline and hence the opposition can sit back and relax, safe in the knowledge time frames will be moved out and their problems will go unnoticed.

    It’s embarrassing to say the least, just how many IT projects fail to deliver on their promises, and absurd to think that there aren’t more lawsuits in this area.

  2. Dan on August 13th, 2006 02:19

    Hey Rob,

    I’m not suggesting that a single project be implemenated by multiple suppliers; instead, I’m suggesting that multiple suppliers bid at the project level, and the most attractive solution is taken forward by the client.

    Consistent failure to deliver by a certain supplier would not bode well for it in future bids…

    It would need some centralised managing, to ensure that the portfolio of solutions being developed had some degree of synergy, but conceptually, I think it works.

  3. Ro b on August 13th, 2006 08:36

    What you say in your first paragraph is exactly how things work – it’s nothing new.

    “Consistent failure to deliver by a certain supplier would not bode well for it in future bids…” Do ya’ think? Sadly, not so in real life!

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