Contracting for Infrastructure Technology (IT) Services – “Software as a Service” Projects

Janice Blake, PMP

Practice Areas: CRM, IT Project Management, Outsourcing, Procurement Management, Service Management, Stakeholder Management

The Evolution of IT “as a Service”
For some time now, when infrastructure technology (or IT), was offered “as a service,” it usually meant contracting for web or platform hosting, as these services could be offered at an attractive price point and standardized product offering. It was a benefit to an organization to consider purchasing this infrastructure as a service, as it was often cheaper and had the same or better performance than was achievable with internal resources. The business case and contracting for these services was straightforward, due to the commodity nature of the products.

On the other hand, the more complex business software that ran on these infrastructures were not commodities, and were typically designed, developed, and hosted with internal resources. There were exceptions to this model, of course, such as specific business requirements around large-scale transaction processing in banking or the transportation sector. However, overall, contracting for software being delivered as a service was the exception, not the norm, and many IT organizations lacked experience with large-scale, long-term contract management.

IT is a complex, ever-changing environment. With time, the Chief Information Officer (CIO) came under increasing budget and delivery pressures just to manage this environment, let alone fulfill new business needs. …

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