Wednesday, 3 October 2007

Brands that get locked in by software oursourcing suppliers

Brand Killer Robots reveal::
Think of your IT systems and business application software as a map of territory, some of which you own and some of which your third party suppliers own. Now sit down and consider, which are the most critical areas of your business operations and where you could be exposed to supplier lockin strategies. You need to look at the areas of potential exposure and consider the following:

1. How big a risk is 'supplier intrenchment' to my business?

2. How can i reduce the risk of exposure from IT intrenchment?

You need to consider if switching IT to another provider or in-house is simple, cost effective and technically achievable?

More than one acquisition candidate has been caught out when acquisition and merger specialists calculated high dependency on third party suppliers, which was too great a risk for the buyers of the business, products or intellectual property .

Watch out for high supplier lockin factors. It may be great for the technology provider - but fatal for you!

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