Many companies are restarting their transformation projects as they transition from protecting their survivability in a volatile market, to actively accelerating their digital transformations to stay competitive in a digital-first world. This has increased the demand for system integrators (SIs) who will be presented with many opportunities to have record-breaking quarters this year.
SIs clearly anticipated a spike in demand heading into 2021. For quite some time now, they have been acquiring companies in some of the more cutting-edge aspects of digital transformation to strengthen their expertise and shore up their topside intellectual property.
While the SI community will face initial challenges integrating the companies they acquired, you can expect them to overcome those challenges quickly and for there to be minimal impact on your engagements thanks to the strength, depth, and breadth of their core operations. The bigger concern for companies should be how they will address the heightened demand for SI services and the potential impacts that can have on how SIs view the opportunity you present to them.
In our work, we are seeing Tier 1 SIs being extremely selective when choosing which opportunities to bid on. Companies are more frequently getting “no bid” responses when they go to market. The SI services market is now a seller’s market, meaning companies today need to sell the opportunities (their projects) to SIs—something they have not had to do before.
Here are four tactics that can improve your chances of SIs bidding on your project:
1. Identify your targeted SI preferences early
Shortlisting your preferences to evaluate SI partners for your transformation program early on affords you time to evaluate your sourcing strategy and the impacts an award of your transformation initiative will have on that strategy. Evaluating the performance and capabilities of incumbent partners is an excellent first pass at compiling your shortlist.
If your shortlist includes seeking bids from SIs that are new to your organization, secure non-disclosure agreements early and engage in dialog. Share high-level scope, general timing, and expected benefits. Seek to understand their capabilities, experience, methodology, and accelerators to both vet their fit and get each SI invested in your process.
2. Socialize your strategy
It’s important to invest time in sharing the details of your strategy, especially with any new SIs. The market for SI services is so strong that SIs have become more selective over where they place their resources. Competition for services is high enough now that new SIs need to feel as if they have a chance competing with your incumbents.
Make no mistake, the SI community is extremely well connected. Any new SI you might want to solicit a bid from on your project already knows in advance who you work with today. They already have a good sense of the hill they would have to climb to unseat your incumbent(s), and they know they already are at a disadvantage from the start. Demonstrating early on that you are willing to invest in educating potential new SIs to close the gap in their understanding of your environment will increase your chances that they’ll bid on your project.
One very effective way to do this is to share your vision for the program and how it fits with your overall corporate strategy. Every little bit of insight you can provide will get the attention of non-incumbents and empower them with knowledge they can use to quickly assess the likelihood they can be successful in a competitive scenario.
3. Executive-level engagement
A highly effective tactic to demonstrate your willingness to invest time and effort into cultivating new relationships is gaining the involvement of executives to support your message. Nothing shows serious interest more than executive-level support and direct executive-level engagement with the providers on your shortlist.
Demonstrate top-down executive support by investing, building, and cultivating SI relationships with your program sponsor and your executives. SIs place a very high value on being able to get the attention of the decision makers. When SIs feel they are able to establish relationships, bend ears, and are provided a platform to learn more about your transformation goals and objectives, they will be better equipped to assess the opportunity and their chances should they compete with an incumbent.
4. Consider sole source negotiation
One final tactic you can use to preemptively address the potential of an SI responding to your RFP with “no-bid” is to offer an incumbent the opportunity to submit a proposal prior to taking the opportunity to market. This is best considered for companies that have a high degree of customization and/or a longstanding incumbent with critical experience and tribal knowledge of your organization.
With so much demand, it simply doesn’t make financial sense for SIs to bid on every opportunity that comes their way. They want to know whether there is a real opportunity for them and what their profit will be if they land your business. If you’re in the market for SI work this year, keep this in mind and make an extra effort to show the SIs how taking on your project will benefit them in the short- and long-term to increase your chances of getting their interest, their best people and their services.
As UpperEdge's Director, IT Sourcing & Commercial Advisory Practice, Greg Hall is responsible for the development and delivery of IT labor strategy solutions, sourcing, negotiation, and supplier management advisory services to UpperEdge clients.
Prior to joining UpperEdge, Greg was a founding member of the IT Finance and Vendor Management Services team at CVS Health. During his 8-year tenure, Greg managed a $350 million plus annual IT Services category spend establishing vendor tiers, standardizing rate cards and implementing rebates programs while driving consistent and compliant master agreement terms. Greg’s efforts reduced labor costs while delivering annual hard dollar rebates of $27 million plus. In addition to labor category management, Greg supported multiple lines of business across retail, PBM, specialty and M&A to successfully deliver sourcing, contract management, purchasing and supplier management capabilities in support of CVS Health’s business.
Prior to CVS Health, Greg was responsible for establishing a Vendor Management Organization and Contingent Workforce program for U.S. Cellular Corporation to manage a $30 million-plus annual spend. While successfully delivering sourcing, contract management, purchasing and supplier management capabilities, Greg negotiated savings in excess of $23.8 million. Greg also built a best-in-class, SLA-driven Contingent Workforce program for Staff Augmentation labor demands. Prior to U.S. Cellular Corporation, Greg spent 5+ years at Heller Financial including nearly two years after being acquired by GE Capital initially working within Heller’s PMO and later managing the $20 million annual infrastructure and desktop outsourcing services.
Including Greg’s first few years at Heller Financial, Greg has 14+ years of IT experience. Prior to Heller Financial, Greg spent 6 years at United Airlines in various IT roles in management and development within flight operations, crew scheduling, cargo and IT transformation. Greg developed United’s first data warehouse for their cargo division, initiated multiple automation efforts netting over $7 million in savings and leading multiple process improvement and transformational efforts.
Greg earned his B.S. in IT Computer Management from Eastern Illinois University.