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Public Council Teleconference: Application Rationalization — Hidden Costs and Smart Decisions
November 17 at 11:00 am US/Eastern (GMT-5)
Join Honorio Padrón, of The Hackett Group, who will share the drivers for companies to tackle application rationalization and the results of research that define the hidden cost of complexity. Additionally, we will discuss key decision milestones—to start or not, holding the course steady and fulfilling expectations.
Virtual Desktop Cost-Benefit Analysis — Michael Jacobs, Catlin Group
The analysis contained in this presentation measures the cost of everything from the machines and licenses to the infrastructure for virtual vs. traditional desktop environments.
Honor your best senior team members - Apply for the CIO Ones to Watch Award
Get well-earned public recognition for your top up-and-coming team members, your IT organization and your enterprise. Award winners will be announced, publicized and feted in May 2010, great timing to help attract new IT recruits to your company.
Learn more about the CIO Executive Council »February 01, 2005 — CIO —
When Carl Ascenzo took over as CIO of Blue Cross Blue Shield (BCBS) of Massachusetts four years ago, the health insurance company outsourced most of its data center operations, help desk and code programming to a single vendor: EDS. Today, however, EDS is only one of four large technology providers working with the New England health insurer.
In order to handle the increasingly complicated negotiations with his growing stable of vendors, Ascenzo expanded a group within IT known as the vendor management office (VMO). Although a rudimentary VMO existed when he arrived at BCBS, Ascenzo added to its responsibilities, building a group that oversees RFPs, works with legal counsel on all contracts and maintains relationships with all vendors. Whereas the initial vendor management group dealt with invoices and back-end activity, the VMO now gets involved at the start of negotiations and helps IT managers make informed decisions on which vendor can offer the best deal and the best service for a particular project. BCBS's VMOled by a manager with financial and IT experiencealso makes sure the vendors know about each other in order to foster healthy competition among them, which ultimately leads to better products, services and pricing for BCBS.
"When we moved from being a single-sourced company to a multivendor model, it became clear we needed an expert who knew all the vendors, was out in the marketplace all the time, and was well-versed in contracts and negotiations," Ascenzo says. "The result is that the prices we are getting are always competitive, and the quality of the work has improved."
BCBS's use of a VMO is not uncommon. Organizations grappling with more complex IT offerings and juggling multiple vendors are increasingly forming VMOs within their IT departments. They are looking for cost savings but also better service and more control over the technology buying process. With a quickly changing technology market and a shift toward more outsourcing and multiple vendors, CIOs are often uncertain whether they are getting the best deals from vendors.
"The market today has become very sophisticated, especially with the increase in outsourcing," agrees Cassio Dreyfuss, a Gartner vice president of research based in Sao Paulo, Brazil. "The dream of any VMO [head] is to offer his or her enterprise exactly the combination of resources and services that are needed, and to pay for exactly what you are using. It's not that the IBMs and Hewlett-Packards of the world are dishonest; they just don't know your company."