How to choose an IT service provider so you don't regret it

Ekaterina Nikolaeva, City — Tashkent, founder of the IT company AMEGA group and the IT Ladies women’s community

The diversity of IT solutions and their providers sometimes resembles a vibrant yet treacherous and dangerous jungle world, where everyone speaks an incomprehensible language. It is often difficult for a layperson from the non-IT world to make sense of everything at once. But if consumers of IT services were experts in IT services, perhaps the IT business wouldn’t exist?

Suppose you, as an interested party, have already clearly determined which class of IT solution you need and have even chosen a vendor for this software, and you have likely already prepared a technical specification for the upcoming project. The final step before starting is to choose a reliable provider. In this article below, we will examine the key tips from Central Asian practice for organizing ERP and BI projects. We are confident that these life hacks will also be useful when choosing IT solutions of other classes.

Tip #1. Look for a provider in the lists of official partners of the software vendor

Most companies that own copyrights have a well-developed partner network, and the list of such partners is usually publicly available on the vendors' websites. For example, the list of 1C partners can be found at this link. And the list of Microsoft Power BI partners can be seen here. What does this information provide? Any vendor imposes a number of requirements on an IT company to recognize it as an official partner: the presence of certified specialists, experience in implementing similar solutions in a specified region, and others. Each vendor may require its own set of criteria from a certified partner-representative, based on which a specific partner is often assigned a certain partner status level: from basic Silver|Gold|Platinum to numerous competency centers in areas such as 1C:ERP, “1C:CORP”, “1C:Document Management”, and so on. It is clear that every software author wants to rely on “tested” partners who can successfully implement the IT solution and not harm the reputation of the software product. Therefore, we recommend looking for the software author, contacting them for an official list of their partner-representatives, and choosing from already pre-vetted partners. By the way, it often turns out that when searching for the full list of partners, you find that there are not one or two in your city, but 10 or more. The more choice, the higher the probability that you will find the right one.

What if the vendor implements its own solutions and has no partners? From my personal experience, I would say this is a warning sign. What if tomorrow the owner/chief architect falls ill or downsizes, leaving the IT world? What will you do as a client when you are left alone with a system that no one is capable of supporting, or to start supporting it, it will take them six months to a year to analyze the components? Personally, I am always against “custom-written” individual solutions that are closed and few others can understand. It is like buying yourself a time bomb — it will explode eventually, the only question is when? But situations vary; you can include your own IT specialists in the project who will learn and then be able to modernize and support the system — this will be your safety net for the upcoming race through the potholes.

Tip #2. Do not trust the partner’s “status” too much

Often, to maintain a certain level of partnership with a vendor, a potential provider is forced to rely on past successes. Do not blindly believe in a beautiful vendor badge on your potential partner’s website. It is necessary to get to know them better: request project resumes of the team, without contacts and even without surnames. Pay attention not only to education but mainly to project experience — where and when they implemented similar projects. Take the time to ask to speak with them on Zoom; perhaps the main specialists have difficult personalities. Often, you encounter specialists who wear a crown and speak condescendingly? Are you ready to stress yourself out, feeding the ego of some “IT genius” who lives in their own world and is not ready to meet your expectations for the IT system? Do not hesitate to contact companies where this provider implemented IT solutions, talk to them, ask for advice on how to organize your project, ask about the difficulties they faced, especially find out how they resolved issues and how the provider behaved in crisis situations: did they accommodate or engage in open confrontation? People love to share their experience, especially if they consider this experience their small victory, and an implemented IT solution is always a corporate victory.

Tip #3. Talk a lot with providers

An important factor for success is determining not only a highly competent provider but also a loyal, honest, and reasonable one. That is, human qualities are still the main priority when choosing. If a provider’s experience is slightly lacking in official documents, but they are ready to work on your project, make it the best, and fully satisfy your expectations from the system — I think this will be an excellent partnership. Provided that their management is functional and the newborn company does not collapse. Personally, I do not like flatterers and petty liars who mislead clients with low prices, hiding the fact that they will have to pay extra for licenses or some customization work. It is better if an IT company comes to you and honestly says: “We will do it well, but the costs will be such, or we will do it ‘cheap and cheerful,’ but here are the difficulties that will arise later.” Ask about risks, about what will happen when the project ends — make sure you are not being tied down without a rope. Inquire about the team’s past failures — it is a lie if they tell you that 100% of people are always satisfied. There are crises in all IT projects — the question is who and how they solve and acknowledge them. You can pass the buck of the problem infinitely, but the customer’s goal is to get a ready-made IT solution, and the contractor’s goal is to find ways to solve project tasks. Pay attention to how the provider speaks about the customer’s teams in their past projects: tomorrow you will be in their place. An important indicator is also the provider’s ability to get along with different IT companies in the market. For example, you find an excellent 1C integrator, and they can recommend colleagues for technical support, or colleagues for methodology development, or BI system providers, or any others. This factor clearly demonstrates that the management is not greedy and knows how to build partnerships with different companies. A good IT integrator will always offer different scenarios for solving tasks, will not try to “push” whatever onto you or do a project just for the sake of the project. In general, talk, talk, and talk again, you will be building communications with these people throughout the entire project. And if their attitude or the personal qualities of the provider’s team raise concerns, try to find out if they can offer you a different team composition and allay your concerns about interactions. The main thing is to discuss in detail how you will take the system into ownership, how you will support it, and what expenses this will require.

Tip #4. Conduct a deep analysis of prices

Direct costs also need to be evaluated carefully: it is impossible to compare apples with tomatoes. For this, you need to have a technical specification for the project perimeter, which specifies: what system is required, what functionality, what level of customization of this functionality, with which systems/equipment integration is required, what data, who, and how it is transferred into the IT system, what volume of licenses, what the architecture will be, how many users, how training should be conducted, what the project methodology will be, what project documents should be prepared, what the warranty period is and what it includes, what the project deadlines are, and many other indicators. This document should describe the customer’s expectations for the project result and should be an appendix to the IT services contract, protecting the customer’s interests.

Often, I encounter the fact that not all providers carefully study this document and present an honest calculation of the cost of their services. Many IT companies work by template and instead of paying attention to the fact that the client requires significant customization in the “warehouse accounting” module, they simply write in their commercial proposal the phrase “standard functionality.” The customer thinks that their customization requests are understood and/or they are included in the standard functionality and accepts this price as truth, wondering why other IT integrators are more expensive? When receiving and comparing commercial proposals, it is necessary to talk with each potential provider and ensure that they have considered all risks, all expectations, and are ready to sign a contract including penalty clauses. Unfortunately, many IT companies to this day use the “hourly rate” calculation method, that is, some hidden algorithm for calculating the average cost per hour of services provided, which is considered the main one for calculating the total cost of the project. Personally, as an integrator with more than 15 years of experience, I still do not understand how such a tariff rate is calculated. In any case, based on the project perimeter, it is definitely possible to understand within what timeframe the project can be implemented in an optimistic/pessimistic time forecast and with what team composition. And these are quite transparent labor costs. Also, the company’s administrative costs: rent, depreciation of fixed assets, employee training, administrative staff salaries, taxes, and others. Add risks to this; in IT, they account for up to 40% of the payroll. And, of course, the integrator company’s profit. It is strange if you find altruists; such businesses often collapse quickly, which is a risk for the customer. Do not be shy about asking potential providers for a detailed justification of the cost of their services.

Well, and bargain! Ask for various bonuses such as “Free training for in-house IT specialists,” “Bonus hours of free technical support,” and discounts!

We are in Asia; it is customary to bargain here.

Good luck with your projects and reliable providers!