Working with technology startups has long been a part of every CIO's job, but the relative importance of that work waxes and wanes with market forces. When the pace of tech change is predictable and the biggest vendors call all the shots, why wander out on a limb with some no-name, bleeding-edge newbie?
Then everything changes again, as it has in today's new era of mobility, cloud and consumer technologies. Suddenly, those slow-moving legacy vendors can't help your business keep up, let alone get ahead of competitors.
"A lot of startups are not only solving the newest problems out there," says CIO Ben Haines of Pabst Brewing, "they're solving them at a faster rate." Haines is one of the CIOs featured in our cover story (" The Risks and Rewards of Using Startups"), which examines the good, the bad and the occasionally ugly outcomes of this risky business of relying on startups.
The upsides can be considerable. Reasonable pricing. Simpler contracts. Faster implementation. Greater influence over product design. Access to leading-edge technology that delivers a competitive edge.
"Startups are a good way to experiment at the edges of your priorities and position your company as an innovator," says William Hsu, co-founder of startup accelerator MuckerLabs.
"A lot of my peers are too risk-averse. They want to make the absolute safest choice," adds Rob Duchscher, CIO of Starkey Industries. "Safe choices lead to a culture of status quo. And status quo, especially today, can make it hard to survive and remain profitable."
Yet the downsides can be daunting. Shaky financials. Lousy customer support. Integration nightmares. Dysfunctional leadership teams. Technology that can't scale to handle enterprise needs.
"It takes time and direct involvement," says CIO Tracey Rothenberger of Ricoh. "But if you're truly getting a unique value proposition that you can't get elsewhere, you have to be willing to invest in this stuff."
That time-and-attention factor is perhaps the most significant piece of the startup puzzle. CIOs who do the best job of managing vendors will tell you they spend 20-30 percent of their time nurturing these partnerships, especially when new ventures are part of the mix.
If you haven't mentored any startups lately, our story may inspire you to get back in the game.
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