Imagine you, a key stakeholder and decision maker at a complex business, who has high hopes of implementing a new digital commerce platform to "revolutionize our operations and become a digital-first juggernaut". You then went through the basic due diligence and selected a System Integrator who promised to deliver results at a fraction of the cost of a more experienced provider. Almost a deal too good to be true. When rubber meets the road, shiny objects and flighty aspirations can quickly turn to a trough of disillusionment as soon as signatures are put on paper. All Systems Integrators are not created equal but are crucial in helping with the technology side to bring your vision to a reality. Let's explore why an experienced System Integrator is an asset and ally to being an ingredient for digital success as the technology will only take you so far.
According to plenty of sources the failure rate of digital transformations falls somewhere in the upper percentiles of 70% to 95% and most of the time it has nothing to do with technology. But even looking at technology projects, a staggering low number are considered successful, and many are utter failures. There are countless reasons why we keep stumbling, and one of them is due to the ever-growing $822 billion technology professional services industry. If you're reading this, surprise, we here at Luminos Labs are a part of this segment. We've seen both the buying and selling side of professional services more than a couple of times. On the buying side it's ultimately an exercise in risk mitigation -- our core motto is "Who can help us avoid brick walls and minimize speedbumps?" Yeah, that's pessimistic, but we're not glossing over the aforementioned stats. Coming from the technology executive perspective, we know that somehow, someway, and somewhere any issue that arises will come rolling back to me when the questions start getting asked. On the selling side...well that's for another time. Out of all the variables of picking a third-party hardware/software/services company, I believe that taking a hard look at the firm's experience is a key indicator of success for your project/initiative. That shouldn't come as a surprise, but the amount of startups and carve-outs happening in an expanding industry results in a ton of marketingese. Often times this marketing is ahead of execution capabilities. This post will provide a synopsis on why experience matters and other variables you should assess when making the determination to outsource. The focus will be on System Integrators that drive, navigate, and support your implementation of a critical Digital Commerce project or initiative.
Once you've made a determination to outsource the work required, a number of major considerations are always in play. However, let's first start with what we are absolutely looking to avoid. These are the speed bumps and brick walls mentioned before:
A Systems Integrator who has been around the block a few times knows how to navigate, or at least minimize these to a large degree. We'd like to say they are table stakes to the dance, but the amount of times the above issues show up in the services industry is astounding.
Great, so the basics are out of the way on what to avoid, but what ARE we looking for in a Systems Integrator to execute our digital commerce project? Let's boil it down to the core macro-level functions:
A team of seasoned individuals with both hands on and functional knowledge in digital commerce development, implementation, and support. They have worked on similar projects and can bring valuable insights to the table that are not often readily available in-house.
Risk is everywhere and there is certainly a correlation with increasing risk as a project goes on longer, scope shifts, and budgetary agreements become murky. An experienced System Integrator will constantly be looking to mitigate risk to the project via quality control, processes, and collaboration to ensure your business is successful in achieving what has been agreed upon.
By outsourcing specialized and complex work, you can free up your internal team to focus on other critical aspects of the business such as the end-customer or internal stakeholder groups like marketing, sales, customer service, and operations. This does not mean work will be completed in a black box, but rather the internal team will be engaged as needed for decision making, input, and consult.
An external service can often be more cost effective than hiring and/or training a team to handle the workload. A measured opportunity cost evaluation should be considered but understand that a System Integrator will also bring established relationships with other vendors, key contacts in the industry to lean on, as well as other resources that you may not need long term but have already been procured and setup by the services team. Just as Digital Commerce is comprised of a technology ecosystem, it's also an ecosystem of people.
This may be your internal team's first time tackling a project like this, but an experienced System Integrator will have dozens under their belt. The System Integrator will be able to leverage existing activities and deliverables as starting points to save time, while allowing you to make decisions as a business unique to your needs, without having to start from scratch. This does not diminish the overall complexity of the project, but rather provides options to tackle the complexity step-by-step in a digestible manner without being stuck in analysis paralysis. When you start adding all the things that have to be done correctly a vast sea of possible System Integrator options, the smaller the playing field gets with those that can actually execute.
If we're talking about System Integrators, it's highly probable they are implementing and integrating a software product, or a group of products. As such, many System Integrators are partnered with technologies that have what is referred to as "metallic" levels such as Platinum, Gold, Silver, Bronze. Technology companies use these as levels within their partner network, particularly if the technology company does not provide professional services themselves. This does not mean Platinum is better than Gold, or Bronze is worse than Silver. Heck, Luminos Labs is Platinum partner with quite a few technologies, but not all of them! It's simply a data point and you should critically evaluate further based on your needs. So if those levels aren't pure indicators of experience, what do we mean by "Expertise"?
Let's take a look at how we view "Expertise" needed in Digital Commerce and the micro-level of detail you should consider:
Exposure and Access to Technology
Your particular project and initiative, preference, and organizational culture may value each of these differently. The key is to understand what areas of expertise are going to most benefit you and your organization attributing to the success of your project. Take into consideration your current internal staff skillsets and how they would best partner with a Systems Integrator so that 1 + 1 = 3.
Utilizing an experienced System Integrator for your Digital Commerce project will help greatly reduce running into those proverbial brick walls and make the speed bumps less turbulent. Finding that balance of an organization who has the deep experience, isn't going to bring an unnecessary army of people, and won't rake you over the financial coals seems like an impossible task - but they do exist. Here are a few actionable tips prior to signing an agreement you should take:
Solicit the technology partner for advice on a few System Integrators that may be a good fit. Do NOT rely solely on this information and use it as a single data point for consideration. Do your own due diligence.
Once you have a solidified Systems Integrator shortlist, work through the courting discussions. Be mindful of what is being sold vs. understood. If they are asking more questions about you than them telling you how great they are; that's a good sign.
Check references! On large projects like this that can greatly affect your internal operations and brand exposure, you should take a "Trust but verify" approach. Ask for a few references that resemble some portion of similarities with your situation: industry, size, business model, complexity, back-office systems, technology platform, etc.
Try and avoid a lengthy RFP with an established list of 100's of requirements early in the game. Go into things with an open mind because you may be limiting yourself right out of the gate with what could be preconceived notions. Exclusions apply if you're obligated by regulatory compliance.
Talk to people at the System Integrator who are likely to be staffed on your project for execution. The Sales to Delivery chasm is VERY wide in professional services which leads to people pitching the dream and the delivery arm having to implement the nightmare. Talking to an individual or two on your project helps with bridging that gap and getting a good sense on how the "way of working" will feel.
Speculate the lowest cost provider if you are putting them in a competitive situation. Be cautious and speculate on why they may be the lowest cost. Are they a low-cost provider? Is something missing from the scope? Did they miss a digit on the proposal?
Collaborate on contingency plans early. Even an experienced System Integrator will be running over those speed bumps with you but there may be external factors in play that are out of both your control. Talk about what the plans are from a financial obligation and execution handover standpoint if things don't go as loosely written. It happens. Risk Management is all about Impact and Likelihood - the stats mentioned early in this article should tell you likelihood is a significant player here. What is your exit strategy?
The Case for an Inexperienced Systems Integrator
Hypothetically, is there a place for an inexperienced System Integrator for your project? There is and it would be irresponsible not to advocate to situations where that may apply. Here are a few circumstances where an inexperienced System Integrator may be applicable:
As long as you keep a constant eye on mitigating that nasty risk, you may be able to pivot the inexperience into a leveraged commercial conversation as the buyer. This doesn't always work but it's a tool in your negotiation toolbox you should have as a decision maker. There is a time and place for an inexperienced System Integrator and it doesn't always have to come at the cost of project failure - all about perspective.
If It Seems Too Good Be True...
Selecting a System Integrator is often an overlooked part of the process of implementing and setting up a Digital Commerce initiative. With digital and technology project failure rates at an alarmingly high level, taking a hard look at the organizations experience is essential. Ultimately, choosing a System Integrator with the right level of experience that matches your needs can help ensure that your project is successful in avoiding those pesky brick walls and reduce the impact of those speed bumps that rear their ugly head.
Let us bring your vision and aspirations of Digital Commerce to a reality. At Luminos, we've helped dozens of businesses over the last 13+ years navigate the complexities of their digital commerce transformation journeys. Please reach out to us to discover together if we can be of assistance.