Blackberry News & Tips Newsletter
 
NEWSLETTERS
 

CIO.com updates, insights and advice on technology, management and your career.

 
 
 
LEADERSHIP
 
CIO Executive Programs
The Leader in Face-to-Face Education for Senior Executives

Offering regional and national programs, CIO (and CSO) events bring together some of the most respected names and thought leaders in information technology and security. Presented by CIOs and other senior level executives, these invitation-only programs offer timely topics and strong networking. Learn More »

 
CIO Executive Council
A Peer-Advisory Service and Professional Association for CIOs

Turn Geeks into Leaders

June 17, 11:30 AM - 12:30 PM U.S./ET (GMT-4)

Larry Bonfante, CIO of the U.S. Tennis Association, will discuss the skills and approaches that your rising IT leaders must learn to be effective in an executive capacity.

How to Handle Your New CEO: Managing Turnover at the Top

June 18, 11:00 AM - 12:00 PM U.S./Eastern (GMT-4)

Turbulent times have increased turnover at the top. Find out what Council CIOs have done to "break in" new CEOs—build relationships, set expectations, educate on the role of IT.

Mid-Market CIO Panel: Tips and Techniques for Improving Vendor Relationships

July 15, 4:00 PM - 5:00 PM U.S./Eastern (GMT-4)

We'll highlight relationship priorities and best practices identified in a Council study, and we'll interact with a CIO panel on the approaches they've used to improve strategic vendor partnerships.

Executive Competencies Assessment Tool

Assess Your Business Leadership Skills with the Council's new benchmarking tool. Rate yourself in change leadership, strategy, customer focus and more.

More / Register »

Learn more about the CIO Executive Council »



 
 
RESOURCE CENTER
 
 
 
SUBSCRIBE TO CIO
 
Are you involved in setting the direction for your company's IT budget or strategy?

Apply today for a FREE subscription to CIO Magazine!

 
 

A New Way To Manage Vendors

CIOs grappling with an increasingly complex marketplace are finding relief by forming VMOs within their organizations.

 

PAGE 4

At the American Red Cross, CTO Dave Clarke says he has cut ongoing operating costs by more than 20 percent from three years ago by rebidding, restructuring or not renewing contracts with software and hardware vendors that his VMO has found to be performing poorly. Clarke says the VMO has helped him save money by tracking spending, which helps the management teams find better deals. "The VMO is a major element of our approach to financial rigor," Clarke says.

The collaboration between Guardian Life Insurance's VMO and its telecommunications department has helped the company cut telecom costs by 35 percent by negotiating a new contract, says Rick Omartian, CFO for IT. By bringing in all of the major telecom players in an RFP process, the company found that it could save money by switching from MCI WorldCom, which had been chosen several years before by the head of the company's telecommunications department, to Sprint and Quest. Before Guardian had a VMO, contracts were often negotiated without RFPs, which meant they didn't always get the lowest price.

Aflac has also saved money through careful negotiations by its VMO. Guth says that when negotiating with a supplier on a hardware purchase, he can leverage volume discounts by adding some IT services into the deal. "Instead of using two companies, I'll use one and get a big discount," he says. In fact, he was able to negotiate such a deal with IBM, which provides both desktops and services to Aflac.

Guth emphasizes that first and foremost, his goal with the VMO is to "maximize Aflac's tech investments so that the company pays a fair and reasonable price in return for superior delivery." He reminds CIOs that getting the lowest price is sometimes less important than assuring a vendor performs well and brings in senior staff to do the job. "Some customers are not savvy and try to get a supplier down on price at any cost," he says.

Creating Vendor Competition
Guth also notes that the VMO allows Aflac to minimize risk by creating its own purchase agreements; the majority of its deals have contracts drafted by Guth rather than by vendors. While such an approach isn't restricted to a VMO, Guth's expertise with legal and financial issues has helped him put this practice in place. This is another good reason to hire the right person to head a VMO.

"When I got here, all of our contracts were on supplier paper, whether they were software licenses or services," he says. "They were all slanted to the supplier. By getting our own form agreements, we help reduce legal risk and operation risk." Microsoft, for example, has negotiated agreements using Aflac's contracts, he adds, giving Aflac protection against possible proprietary rights infringement and any other contract-related risks. Guth speaks with pride about this accomplishment but admits that vendors haven't always liked working from Aflac's contracts. He stresses that his legal background led him to insist that Aflac use its own contracts wherever possible and also notes that vendors have been willing to accept the unorthodox arrangement because Aflac treats vendors fairlyââ¬â¬not always driving for the rock-bottom price.

 
 
Loading...
 
WHITE PAPERS

Managing an Offshore Development Center

Since the early 1990's companies have been searching for places in the world where they can tap into reduced development costs and a better business environment.
 

The Future of Financial Reporting

Finance and accounting executives must understand, adapt to, and manage the costs associated with changes: and doing so opens an opportunity to leverage this shift to better position their companies in the eyes of the investment community.
 

Offset Expenditures with Old Switches

Learn how to unleash the hidden cash in your used equipment.
 

Cost Effective Data Loss Prevention

Learn how Data Loss Prevention technologies can in fact be deployed in a cost effective manner.
 

Data Loss Prevention and Enterprise Rights Management

Enterprise Management Associates highlights the complementary values of Data Loss Prevention and Enterprise Rights Management as a strategic approach to information risk control.
 

Investing in Business Analytics Technology

Find the answers to your questions about business anyalytics initiatives.
 

WEBCASTS

IT Consolidation Made Easy

The Primary IT Initiative for Reducing Costs
 

Webcast with Dan Vesset: Investing in Business Analytics Technology

What exactly is business analytics and why should you care? Dan Vesset of IDC and Gaurav Verma of SAS answer this a...
 

Capitalize on Your SAP Content

After 18 years of partnership and over 3,000 successful customer deployments, Open Text has become SAP's premier pa...
 

Enterprise Cloud Computing: Ready for Primetime?

The progression toward enterprise cloud computing is happening today, as industry leaders deploy technologies that ...
 

Preparing Your Business Services for the Future

Would you trust your network monitoring tools enough to know when something is truly halting a business service? Wh...
 

Enterprise System Management Challenges in Big Organizations with Eli Almog

In this Podcast with Eli Almog, Corporate Architect in BMC's CTO Office, discusses how IT managers can know when it...
 

Resource Alerts

Get instant email notifications by topic when white papers, webcasts, and case studies are added to our library.

 
FEATURED SPONSORS
 
 
 
SPONSORED LINKS
 

Offshoring Risks - How Will You Stay in Control?

Accenture IT Consulting: Enabling high performance. More...

Top Five CIO Challenges

Insight makes it easy to spend your Microsoft subsidy check.

Five minute business analytics assessment. Immediate results.

Dangerous Collaboration Practices: 5 Ways IT Can Minimize Risk

Accenture: Outsourcing for uncertain times. Click to learn more.

The Case for Investing in Business Analytics Technology. Read white paper.

Live Webinar: Applying Business Analytics. Click here to learn more

Seven Ways ITIL Can Help You in an Economic Downturn

Developing A Dynamic, Real-Time IT Infrastructure

Maximizing the Business Value of the PC Infrastructure

Communications and Collaboration Needs at Business Organizations

Using Open Source to Deploy Web Applications

Cloud Computing: Read about VMware's compelling vision & set of products

Enterprise PBX Buyer's Guide

Secondary Market Primer: Your Network at Half Price

How Interactive Viewer Reduces the Effort to Meet Visualization Requirements

Top-line Performance that's Bottom-line Efficient

White Paper: 8 Key Ingredients to Building an Internal Cloud

Read about virtualization and consolidation effort best practices

Building the Virtualized Enterprise with VMware Infrastructure

The Global Marketplace Today: Strategies for Tough Times

Top 10 Business and IT Drivers for the Wealth Management Sector

5 Steps to Automating Accounts Payable

Introducing the new HP ProLiant G6 server family

Accenture: Outsourcing for Competitive Advantage. More...

Better spam protection with Postini for just $1/user/mo

Introducing the new HP ProLiant G6 server family

infoBOOM! - The Mid-Sized Company CIO's Exclusive Community

Accenture IT Consulting: Logical meets technological. More . . .

The Fraudster Economy Model: Operating a Business in the Underground

Trade in your old laser printer and get up to $1000 back!

Taking the Service Desk to the Next Level

Revolutionizing Enterprise Application Deployment

Why Data Loss is Increasing--and What You Can Do About It

Data Loss Prevention: A Better Way to Approach Security

Learn how to managing client systems in the enterprise.

Build a High-Performance Open Web Platform

Mid-Sized Company CIO Community: infoBOOM!

Enterprise PBX Comparison Guide

Getting Value from Outdated Networking Equipment

Losing Ground: 2009 TMT Global Security Survey

Stop Application Fraud at the Source with Device Reputation

Learn about the VMware vSphere (TM) & Intel (R) Xeon (R) Processor 5500 Series

Learn how a virtualized enterprise can help your company reduce costs

Why Isn't Server Virtualization Saving Us More?

Learn how to save 30% through project & portfolio management.

How Open Source is Changing the Face of Enterprise Software

8 Key Ingredients to Building an Internal Cloud