Tower Procurements Are the Problems?

Posted on Feb 27th, 2023

The tower model was intended to enable organisations to move away from large IT service management contracts provided by a single prime outsourcer. The new structure has separate IT components – hosting, applications development, security and desktop support contracted to different providers. One provider then takes on the role of Service Integration and Management (SIAM) to manage the various towers, without providing any of the tower's contracts themselves.

Principally there is a lack of awareness of the implications for the organisation undertaking the use of a Tower Model.

For example, though Boeing did not choose to adopt a Tower Procurement they did decide to outsource the design and build of the Dreamliner, they failed to realise that they needed to adopt a different model of managing the contractors and facilitating the parties in working together. The result is large delays and cost overruns.

Most Tower Procurements I have seen fail to retain a strong central team that can manage the System Integrator. Worse they have not thought through all the implications of the relations between the Towers and thus the suppliers must exploit the gaps as they must maximise the return for their shareholders. So that is the problem, I will discuss how to resolve it in my next blog. If you need any more support, please feel free to contact us.