The six million dollar vendor

The six million dollar vendor

Few CIOs would be ready to claim expertise at managing partnerships with vendors, but it is a skill that must be mastered at all levels of decision making and contractual negotiations

Jetstar CIO, Stephen Tame

Jetstar CIO, Stephen Tame

It is an issue that must be considered on a company-bycompany and person-by-person basis. Although some in IT are capable of assuming more business-like responsibilities, it certainly doesn’t apply across the fold, and can be an area of great difficulty to control without a CIO’s knowledge of the team members involved.

Putting in proper lines of communication between vendor, client and management on both sides of the fence, too, is also of extreme importance, says McGregor, especially when it does come down to the inevitable tit-for-tat over contract disputes. “Quite often people don’t know what it is they’re fighting about,” McGregor says.

For Tame, the simplest solution has been to embed the vendor’s own people into the Jetstar business. Though they are not on the airline’s payroll, they are held directly responsible for failures, if any, and the daily tasks inherent in providing contracted services.

More importantly, each quarterly review and contract renegotiation is carried out with the aim of further integrating vendor staff and building accountability from the vendor itself; “it needs to be more engaged and more aligned than what we had previously”.

Each step at Jetstar is, in effect, a redesign of the partnership aimed at achieving better outcomes rather than retaining the status quo.

“I don’t think people have quite worked out what the sweet spot is in vendor management,” Jew says. “But I think they’re getting there.”

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