How critical you are as a IT Service Provider for your customer?


It is not that uncommon to hear about changing Information Technology (IT) priorities of your customers. The impacts due to the changes are your projects getting shelved, revenue stream forecast affected, demotivated resources, resourced getting shifted to new projects / teams, attrition etc 

There are many frameworks that Customers use to align their IT strategies and one such is “McFarlan and McKenney Strategic Grid”. Knowing these frameworks will obviously help you to align yourself to your customer’s IT objectives in turn helping your business to grow.

If your customer is not having any such framework in place to decide on their IT strategies, you can counsel him with similar such frameworks. By the way the original intent of this framework is to help companies to evolve their IT strategies :), though I am presenting my views here from am IT service provider context. 

As you see below the grid is a simple four quadrant matrix where the IT applications that fall into different quadrants take different importance / priorities to your customers

Strategic impact of Current Information Systems Strategic impact of future information systems
  Low High
Low Low – Low (Support) Low – High (Turnaround)
High High – Low (Factory) High – High (Strategic)

 Low – Low (Support) 

The first quadrant where the strategic impact of current and future impact of Information systems is “low” is one where the customer’s focus is going to be the least. If you are one the vendors who is providing services in this bucket of applications, you are going to have a trouble to grow the business with the customer. Your options are either to come up with something innovative in this Quadrant of IT application or to penetrate to other quadrants 

High – Low (Factory) 

The bottom left is also a problematic one because your applications may be in lime light as of now but that doesn’t have potential to grow, hence at the best you can look at is some continuous maintenance revenue streams. If you are one the vendors who is providing services in this bucket of applications, to grow your business you have to diversify to top right and bottom right corner

Low – High (Turnaround) 

The top right corner is one where the current IT impact is less but potential future impact of IT is very high. These are the applications which will help your customer to differentiate himself in the market and they can be considered as applications that can turnaround your customer’s prospect. You as an IT service provider should focus on evolving new technologies / solutions in this area if you like to be a part of the future IT initiatives of your customer in this quadrant

 High – High (Strategic)

The bottom right quadrant contains the applications which has highest priority for the customer now as well as in future. If you are into this quadrant you have to ensure your services are top notch as the customer may not compromise in service / product quality, otherwise you would be replaced by someone more competent. Similarly you keep abreast of latest technology / solutions in this space will help to grow your relationship with your customer in future

 Share your thoughts ….

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