Abaran Deep of PCI Group Pty Limited, a sponsor company at the marcus evans Australian CIO Summit 2014, on vendor selection and getting the desired business outcomes from IT contracts.

1. Interview with: Abaran Deep,
Partner, PCI Group Pty Limited
The best way to manage risk and
achieve the desired outcomes in a large
outsourced Information Technology (IT)
project is to establish a collaborative
contracting framework with the vendor,
says Abaran Deep, Partner, PCI Group
Pty Limited. A collaborative contracting
framework ensures risks and rewards
are shared and a positive psychological
foundation is laid. Where this is not the
case, as with most traditional contracts,
there is a high probability that the
project will not deliver its business
goals.
PCI Group Pty Limited is a sponsor
company at the marcus evans 13th
Annual CIO Summit taking place in
the Gold Coast, Queensland, Australia,
28 - 30 July 2014.
What should Chief Information
Officers (CIOs) do to ensure that
they get the desired business
outcomes from their IT service
providers?
Large outsourced IT projects have a
high degree of risk or uncertainty. For
such projects the CIO should avoid
traditional commercial frameworks with
a fixed contract price or a schedule of
rates.
Traditional approaches are counter-
productive – they tie up a lot of time
and energy in specifying all the details
early on to put a fixed price on a fixed
scope. Vendors are better at playing
that game than clients and always find
grounds for scope variation.
Instead CIOs can ensure the success of
their IT projects by focussing on three
areas: develop the right technical
contract (clarify project outcomes in
terms of business objectives); develop
an appropriate commercial contract (link
vendor profits to achievement of
customer‟s objectives); and establish a
sound human contract (foster
collaborative behaviours and effective
leadership).
How should CIOs engage their
vendors to ensure project success?
Large and complex projects need
vendor and client teams to work
together collaboratively. This requires
CIOs to understand the psychology of
the contract that they use to engage a
vendor.
In our recently published thought
leadership paper, “An overview of
collaborative contracting: Making
collaboration effective and choosing
the right framework”, we contend
that more often than not, the
procurement relationship is based on a
win/lose paradigm where client
organisations end up paying vendors to
do the wrong things.
Specifically, in most complex projects
that under-performed we have found
that the commercial framework drove a
win/lose outcome where - if difficulties
arise - one party wins at the other‟s
expense.
Furthermore, the vendor selection
process must place equal importance on
the quality of people and leadership of
the vendor team to ensure that the
client gets people with the right values,
skills, and competencies to join the
project. Thus, the selection process
must not be based solely on the “hard”
technical competencies, but also the
“soft” leadership and teamwork
competencies that affect motivation and
performance.
Selection and procurement are front-
end activities but what happens in
the rest of the life of an IT project?
At PCI, our experience shows that the
conduct of the selection process
establishes the DNA for the project
culture.
Therefore it must be conducted in a way
that establishes the foundations for a
positive working relationship, one that is
able to stand the stresses and strains of
complex project delivery over time.
Hence, vendor selection and contract
establishment must address technical,
commercial, and human dimensions.
Once the contract is established,
investment is needed to integrate client
and vendor people and coach them to
become a high performing team – this
does not happen by accident. This
investment is necessary to cement the
“your success is my success” mindset
enabled by the collaborative contracting
framework.
More importantly, the project team
needs the change management
capabilities to skilfully engage the
multitude of stakeholders and enrol
their support for business changes
required for successful IT implement-
ation. Change management is a critical
and inherent aspect of large IT projects
and the project team needs to be given
skills and capabilities to work alongside
the business to support the implement-
ation needs throughout life of project.
Good organisations
recognise that
complex IT projects
require a contractual
framework that
aligns the parties‟
interests and
promotes
collaboration
Getting the Desired Business Outcomes
from IT Service Providers

2. The Information Technology
Network - marcus evans
Summits deliver peer-to-peer
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closed business event and the
number of participants strictly
limited.
About the Australian CIO Summit 2014
The Australian CIO Summit is the premium forum bringing elite buyers and sellers
together. As an invitation-only event taking place behind closed doors, the summit
offers enterprise and government chief information officers and IT solution
providers an intimate environment for a focused discussion of key drivers for IT
innovation. This unique forum will take place at the newly-renovated RACV Royal
Pines Resort, Gold Coast, Queensland, 28 - 30 July 2014. The Summit features
presentations on implementing the right cloud model, crafting simple and powerful
mobile solutions, streamlining processes and living up to shifting realities for the IT
leader.
www.australianciosummit.com
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About PCI Group Pty Limited
PCI is acknowledged as a leading advisor, facilitator and coach for the establishment and delivery of collaborative contracts for
complex projects and programs. PCI works with client organisations on complex procurements to create an environment in which
suppliers and customer objectives are aligned („win or lose together‟) and in which team members from all parties can work
together in truly integrated teams which perform at very high levels
www.pcigroup.com.au
About marcus evans Summits
marcus evans Summits are high level business forums for the world‟s leading decision-makers to meet, learn and discuss
strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to
individually tailor their schedules of keynote presentations, case studies, roundtables and one-to-one business meetings.
For more information, please visit: www.marcusevans.com
To view the web version of this interview, please click here: www.australianciosummit.com/AbaranDeep