Recently I came across two publications that IDG, the publisher of this magazine, produced in 1996. One ranked the top 100 companies in Australia, while the other listed the top 50 software companies - both made interesting reading. Five of the top seven hardware companies had either merged, disappeared or were substantially different organisations now to what they were in 1996. Similarly, the top 20 software suppliers contained at least seven organisations that had experienced radical change in the last six years. For CIOs this level of turbulence in the IT vendor community is an undoubted challenge. How can you partner with a supplier to help you fulfil your company's strategic directions if you are not even sure the company will be around in the near future?
Despite CIOs reliance on IT suppliers, managing them is not a high priority. In IDC's annual Forecast for Management survey this task consistently rates near the bottom of the challenges at hand for CIOs over the next 12 to 18 months. There are clearly significant benefits to be gained from effectively harnessing your supplier base. Rationalising these companies saves time, establishes standards to reduce support costs and can foster a spirit of partnership with your favoured vendors.
Unfortunately, very few CIOs I talk to acknowledge they have been able to achieve such cooperation with their suppliers. Poor, short sighted, vendor account management is a common grumble I encounter. Despite what many IT vendors may believe, most CIOs want much more than the cheapest price. In fact, hey rank technical capabilities, responsiveness, past experience and service features as their major decision criteria.
With the IT industry undergoing such dramatic rationalisation, CIOs clearly should not short-circuit the evaluation and selection process. A formal tender process forces the organisation to articulate its needs and, thus, helps clarify business expectations. Furthermore, it provides a discipline by which written competitive bids are received and assessed, protecting those involved from any accusations of favouritism.
One of the outputs of a tender process is that, in these turbulent times, it also allows scrutiny of the financial well-being of any supplier. Recently, CIO (US) drew up a checklist of signs which it believed indicated an organisation was in trouble. These include: constant restructuring and layoffs; very high staff turnover and little continuity in account management; several of the top executive leave in quick succession and a heavy reliance on long-standing products with little evidence of investment in research and development.
All most CIOs want is an effective account manager who can represent their interests and garner resources for their needs. From my time in sales I know that all most account managers want is to deal with a prominent CIO whose requirements can help them meet their quota. Perhaps the trick is that both parties need to see problems not as difficulties but as opportunities to earn each other's trust of the other. The relationship between user and supplier is like a marriage, and marriages that survive do so because both parties gain strength from overcoming challenges.
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