Amidst the oftentimes sombre news about the Covid-19 pandemic are encouraging reports on how companies are using technology to overcome the unprecedented disruptions they face.
Cloud computing, data analytics and voice-over-IP technologies are enabling companies to continue operations despite office closures - conducting virtual business meetings, matching orders to delivery slots in real-time, serving customers via interactive digital platforms and keeping office workers in productive employment through telecommuting.
They clearly demonstrate the economic and human benefits of digitalisation, and are spurring others to accelerate the use of technology across their organisations.
Nevertheless, companies should resist the temptation to rush headlong into acquiring the latest and shiniest pieces of technology. Hasty unplanned technology acquisitions can turn into an unnecessary drain on a company’s limited finances and management time. To avoid such costly quagmires, careful staging of the technology procurement process is essential.
As a first step, it is important for the company to consider what solution it truly needs for its own business requirements and to select the most appropriate technology supplier accordingly.
Can the identified requirements be met by commercially available off-the-shelf (COTS) products? COTS products offer hardware and software solutions which are pre-packaged for relatively fast deployment to meet the standard requirements of most enterprises. If not, does the company require a blue-sky solution which integrates COTS products with customised coding and bespoke system architectures? These considerations help to filter the field of suitable technology suppliers which the company can approach with an invitation to tender (ITT) or invitation to quote (ITQ).
The task of preparing the company’s ITT or ITQ is foundational to the technology procurement process. This should be done by a multi-stakeholder team comprising procurement personnel as well as managers with in-depth knowledge of the underlying business and operational needs. In crafting the desired solution specifications, the team must be mindful not to over-specify requirements as they could result in significant cost and delivery overruns.
For example, is it really necessary to require state-of-the-art machine learning algorithms for a chatbot intended to answer a finite range of customer queries? Or can such a chatbot be more efficiently built and operated with open source scripts like Python or JavaScript? And is the chatbot so mission critical that it must be hosted on a battery of dedicated servers with not less than 99.95% uptime?
A disciplined methodical approach in scrutinizing technical requirements against actual business needs is paramount if project costs and delays are to be contained.
In addition to right-sizing its technical requirements, the company should aim to furnish as much information as feasible to potential suppliers. The ITT or ITQ should contain details on its business objectives, conditions of contract, implementation timeframe as well as procedure for suppliers to seek clarifications. It is frequently helpful to conduct briefing sessions to share the company’s expectations and to clarify any assumptions or issues which potential suppliers may have. For example, does the company operate any existing hardware or software which it intends to retain? If so, does the new technology solution need to interface with such legacy systems?
These systems may be running on software written in old programming languages like COBOL which will require suppliers to source for project personnel skilled in these arcane computer languages. Such clarifications and information sharing will enable potential suppliers to better craft their offers to meet the company’s requirements. This should also limit the risk of mismatched expectations and reduce the likelihood of potential disputes between the parties.
Following the issuance of its ITT or ITQ, the company can expect to receive responses from interested suppliers. Their offers would contain details of various proposed solutions, associated pricing structures, projected delivery timelines and information on the suppliers’ personnel responsible for implementing the solutions.
Aside from evaluating the financial costs and technical capabilities of these proposed solutions, other areas which the company should review include the licensing terms, change control and resourcing mechanisms.
The following are some lines of enquiry which the company may consider pursuing. Does the software licence limit the number of concurrent users within the company? Would different licensing conditions and metrics apply if the software is installed in a virtualised operating environment? What is the change control process to effect possible project changes? How are the cost and timeline implications for such change requests assessed? Has the supplier resourced its proposal with an adequate number of skilled personnel? If these personnel are subsequently redeployed, what is the mechanism for ensuring their replacements have similar experience and skills?
A proper evaluation of the financial, legal, technical and project management aspects of the offers, will enable the company to make a well-informed decision on the most suitable solution and supplier for its requirements.
The company’s selection of the right technology solution and supplier is a critical success factor. As the technology project moves into the build and delivery stages, significant levels of cooperation will be expected from both parties. Where agile software development methodologies are employed, the supplier will need regular feedback from the company’s business users throughout its cycle of design, coding and testing activities.
In turn, the company will expect the supplier to fix any coding bugs or user-experience issues in a timely fashion. These are fair expectations as the company and the supplier need to work together to achieve the desired results. Having clear project objectives and cultivating a strong relationship with effective team engagement will provide a cooperative environment where the procured solution can be implemented quickly and effectively.
A successful technology procurement will buttress the company’s ability to ride out the storm and ensure its business is well-positioned to stay ahead digitally when the crisis is over.
Contributed by Vincent Kor, who is the General Counsel of the Government Technology Agency where he advises and works on various technology law matters.
This article was first published by the Government Technology Agency of Singapore on May 6, 2020. The opinions expressed in this publication are those of the authors. They do not purport to reflect the opinions or views of Bank of Singapore Limited or its affiliates.
Disclaimer applicable to recommendation
IMPORTANT INFORMATION:
The contents of this presentation have not been prepared or reviewed by Bank of Singapore Limited (the “Bank”). The Bank is not responsible for the accuracy or completeness of the information contained in this presentation which may change without prior notice. If you have any questions regarding the presentation, please refer your questions to the presenter. This presentation may contain views which are not representative of the views of the Bank, and such views may have been derived without discussion, consultation or agreement with the Bank. You will need to decide as to whether or not the contents are suitable for you. When you are in doubt, please seek your own independent financial, legal, tax or other advice as you deem fit. Neither the Bank nor any of its officers accept any liability for any loss whatsoever arising out of or in connection with your use of the information in the presentation.
Cross-Border Marketing
Australia: Bank of Singapore Limited (i) is exempt from the requirement to hold an Australian financial services (AFS) licence under the Corporations Act 2001 (Cth) in respect of all financial products or financial services it provides in accordance with ASIC Class Order 03/1102 (as continued in force by ASIC Corporations (Repeal and Transitional) Instrument 2016/396) to any person in Australia who is a wholesale client, and (ii) is regulated by the Monetary Authority of Singapore under Singaporean laws which differ from Australian laws. Brunei: This document has not been delivered to, licensed or permitted by the Autoriti Monetari Brunei Darussalam, the authority as designated under the Brunei Darussalam Securities Markets Order, 2013 and the Banking Order, 2006; nor has it been registered with the Registrar of Companies, Registrar of International Business Companies or the Brunei Darussalam Ministry of Finance. The products mentioned in this document are not registered, licensed or permitted by the Autoriti Monetari Brunei Darussalam or by any other government agency or under any law in Brunei Darussalam. Any offers, acceptances, sales and allotments of the products shall be made outside Brunei Darussalam. Hong Kong SAR: Bank of Singapore Limited is an Authorized Institution as defined in the Banking Ordinance of Hong Kong (Cap 155), regulated by the Hong Kong Monetary Authority in Hong Kong and a Registered Institution as defined in the Securities and Futures Ordinance of Hong Kong (Cap. 571), regulated by the Securities and Futures Commission in Hong Kong. Indonesia: The offering of the investment product in reliance of this document is not registered under the Indonesian Capital Market Law and its implementing regulations, and is not intended to constitute a public offering of securities under the Indonesian Capital Market Law and its implementing regulations. According, this investment product may not be offered or sold, directly or indirectly, within Indonesia or to citizens (wherever they are domiciled or located), entities or residents, in any manner which constitutes a public offering of securities under the Indonesian Capital Market Law and its implementing regulations. Japan: The information contained in this document is for general reference purposes only. It does not have regard to your specific investment objectives, financial situation, risk tolerance and particular needs. Nothing in this document constitutes an offer to buy or sell or an invitation to offer to buy or sell or a recommendation or a solicitation to buy or sell any securities or investment. We do not have any intention of conducting regulated business in Japan. You acknowledge that nothing in this document constitutes investment or financial advice or any advice of any nature. Malaysia: Bank of Singapore Limited does not hold any licence, registration or approval to carry on any regulated business in Malaysia (including but not limited to any businesses regulated under the Capital Markets & Services Act 2007 of Malaysia), nor does it hold itself out as carrying on or purport to carry on any such business in Malaysia. Any services provided by Bank of Singapore Limited to residents of Malaysia are provided solely on an offshore basis from outside Malaysia, either as a result of “reverse enquiry” on the part of the Malaysian residents or where Bank of Singapore Limited has been retained outside Malaysia to provide such services. As an integral part of the provision of such services from outside Malaysia, Bank of Singapore Limited may from time to time make available to such residents documents and information making reference to capital markets products (for example, in connection with the provision of fund management or investment advisory services outside of Malaysia). Nothing in such documents or information is intended to be construed as or constitute the making available of, or an offer or invitation to subscribe for or purchase any such capital markets product. Myanmar: The provision of any products and services by Bank of Singapore Limited shall be solely on an offshore basis. You shall ensure that you have and will continue to be fully compliant with all applicable laws in Myanmar when entering into discussion or contracts with Bank of Singapore Limited. Oman: This document does not constitute a public offer of investment, securities or financial services in the Sultanate of Oman, as contemplated by the Commercial Companies Law of Oman (Royal Decree No. 4/1974), Banking Law of Oman (Royal Decree No. 114/2000) or the Capital Market Law of Oman (Royal Decree No. 80/1998) and the Executive Regulations of the Capital Market Law (Ministerial Decision No. 1/2009) or an offer to sell or the solicitation of any offer to buy non-Omani investment products, securities or financial services and products in the Sultanate of Oman. This document is strictly private and confidential. It is being provided to a limited number of sophisticated investors solely to enable them to decide whether or not to make an offer to invest in financial products mentioned in this document, outside of the Sultanate of Oman, upon the terms and subject to the restrictions set out herein and may not be reproduced or used for any other purpose or provided to any person other than the original recipient. Additionally, this document is not intended to lead to the making of any contract within the territory or under the laws of the Sultanate of Oman. The Capital Market Authority of Oman and the Central Bank of Oman take no responsibility for the accuracy of the statements and information contained in this document or for the performance of the financial products mentioned in this document nor shall they have any liability to any person for damage or loss resulting from reliance on any statement or information contained herein. Russia: The investment products mentioned in this document have not been registered with or approved by the local regulator of any country and are not publicly distributed in Singapore or elsewhere. This document does not constitute or form part of an offer or invitation to the public in any country to subscribe for the products referred to herein. South Korea: The document does not constitute an offer, solicitation or investment advertisement to trade in the investment product referred to in the document. The Philippines: The information contained in this document is not intended to constitute a public offering of securities under the Securities Regulation Code of the Philippines. Dubai International Financial Center (DIFC): Bank of Singapore Limited has a branch registered in the Dubai International Financial Centre ("DIFC") which is regulated by the Dubai Financial Services Authority (“DFSA”). Bank of Singapore Limited (DIFC Branch) is not a financial institution licensed in the United Arab Emirates outside of the DIFC and does not undertake banking or financial activities in the United Arab Emirates nor is it licensed to do so outside of the DIFC. This material is provided for information purposes only and it is general information not specific in any way to any particular investor, investor type, strategy, investment need or other financial circumstance. As such this information is not financial advice or a financial promotion, nor is it intended to influence an investor's decision to invest. It is not to be construed as an offer to buy or sell or solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The material is only intended for persons who fulfill the criteria to be classified as “Professional Clients” as defined under the DFSA rules and should not be reviewed, received, provided to or relied upon by any other person. United Arab Emirates (U.A.E): The information contained herein is exclusively addressed to the recipient. The offering of certain products in this document has not been and will not be registered with the Central Bank of United Arab Emirates or Securities & Commodities Authority in the United Arab Emirates. Any products in this document that are being offered or sold do not constitute a public offering or distribution of securities under the applicable laws and regulations of the United Arab Emirates. This document is not intended for circulation or distribution in or into the UAE, other than to persons in the UAE to whom such circulation or distribution is permitted by, or is exempt from the requirements of, the applicable laws and regulations of the United Arab Emirates. The distribution of the information contained herein by the recipient is prohibited. Where applicable, this document relates to securities which are listed outside of the Abu Dhabi Securities Exchange and the Dubai Financial Market. The Bank of Singapore Limited is not authorized to provide investment research regarding securities listed on the exchanges of the United Arab Emirates which are outside of the DIFC. United Kingdom: In the United Kingdom, this document is being made available only to the person or the entity to whom it is directed being persons to whom it may lawfully be directed under applicable laws and regulations of the United Kingdom (such persons are hereinafter referred to as ‘relevant persons’). Accordingly, this document is communicated only to relevant persons. Persons who are not relevant persons must not act on or rely on this document or any of its contents. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. Relevant persons in receipt of this document must not distribute, publish, reproduce, or disclose this document (in whole or in part) to any person who is not a relevant person. United States of America: This product may not be sold or offered within the United States or to U.S. persons. In Hong Kong, Bank of Singapore Limited is a branch of Bank of Singapore Limited incorporated in Singapore with limited liability.
© 2019 Bank of Singapore Limited. All rights reserved.
Version: December 2019