How UK CIOs manage vendor relationships

Centrica CIO Mike Young takes a two pronged approach: using acquisitions of startups to introduce sector innovations and partnerships with established tech giants to add more fundamental technologies.

Recent acquisitions include those of Panoramic Power, an Israeli company that produces sensors that transmit real-time data from appliances, Neas Energy, a Danish energy management firm; and Restore, a Belgian demand response aggregator.

His key strategic partnerships are with Microsoft, SAP, Vertafore and Cognizant.

“We lean into our partners to get different views, to check what they might be doing in the space, and to draw some level of comfort about how things might be evolving,” he says.

Read next: Centrica CIO Mike Young deploys data to drive energy efficiencies

Belron Chief Information and Digital Officer Nick Burton finds emerging technologies that can help the vehicle glass repair business through the Drive with Belron accelerator.

The latest cohort of the accelerator included Soft Edge, the producer of a mobile app that detects hail damage through image analysis, Bonobos, which analyses recordings of customer phone calls, and RightIndem, which automates decisions on customer claims.

Belron and innovation specialists L Marks will invest a total of £200,00 to help the startups develop their tech. All three focus on AI, but Burton is more concerned with the individual solution than the area of technology.

“We didn’t pick these ones because of the AI,” he says. “We picked them because of the solution. It just so happened that machine learning of some sorts is key to what they do.”

Read next: Belron CIDO Nick Burton applies AI across the vehicle repair business

Virgin Trains CIO John Sullivan chooses vendors after a formal tender process and an assessment of the business relationship.

He picked Box for cloud storage because the company’s roadmap fit the plans of Virgin Trains, and Amazon after being impressed by the commitment.

“In digital transformation, if you want to be on the leading edge, you want to have those good relationships and have access to the technical staff and their capabilities,” he says.

Read next: Virgin Trains CIO explains how he ensures adoption of new services

Picsolve CTO Dan Maunder has been helping the theme park photography company expand abroad through tech acquisitions. In 2017, Picsolve bought digital imaging business Freeze Frame, which added another 23 visitor destinations in North America to the portfolio, as well as regional expertise and the new market of observatories.

Now that Picsolve has a new industry-leading photography platform and a big market in which it can be installed, Maunder will be focusing on the company’s internal capabilities.

“That’s purely because the technology and the investment that we’ve got in our technology is putting us in a place where we are the number one provider for photographic and video services across parks, attractions, and other markets,” he says.

“While we’re in the midst of our programme for the next-generation platform, I think we’ll put any technology acquisition on the back burner.”

Read next: Picsolve CTO Dan Maunder redefines theme park photography

Established car manufacturers face stiff competition in the autonomous vehicles market from digital upstarts, which led Volvo CIO Atif Rafiq to turn the disruptors into allies.

The Swedish automaker has partnered with Uber to develop self-driving cars, with Google to add its apps to Volvo’s in-car infotainment system, and with Amazon to create an in-car delivery system. Rafiq believes the approach has brought Volvo close to the innovations at Tesla.

“They certainly woke up the industry but they’re not ahead everywhere,” he says. “A number of those partnerships I think put us ahead of the pack.”

Read next:  Volvo CIO Atif Rafiq draws autonomous car roadmap

Southampton FC IT Director Matthew Reynolds has added both functionalities and efficiencies by integrating a number of legacy systems produced by separate suppliers into a single platform provided by Workday.

Finance, HR, payroll and procurement are all now managed through Workday, and Reynolds plans to add further integrations for the club’s commercial activities and fan engagement.

“I can be authorising a purchase order and go straight into HR record at the same time in the same entity,” says Reynold. “That’s affected every single person that works here. Whether they want to book a holiday, write a purchase order, authorise payments, or check their salary, it’s all in one tool.”

Read next: Southampton FC IT Director Matthew Reynolds kicking tech into football

The Driver and Vehicle Standards Agency (DVSA) has been bringing digital services in-house after some long-term outsourcing contracts with large providers come to an end.

The change in strategy has allowed Director of Digital Services and Technology James Munson to create new digital services such as an MOT expiration reminder tool and a vehicle test history checker. These can now be adapted to changing technology and user needs as the DVSA sees fit.

“It’s really enabled us to work in a different way,” says Munson. “We started to work in a more agile and more iterative way. We went live back then with an MVP – a minimum viable product – and then we’ve added more services on there to continue to drive road safety.”

Read next: James Munson describes new digital strategy at the DVSA

Dylan Roberts needs different pieces of software to work together in the products he rolls out to citizens, such as a multimodal transport app that integrates solutions from a variety of transport companies and data firms, but vendor lock-in often makes this difficult.

“If they provide solutions which lock you in and they won’t easily interoperate or integrate with each other then how can you have a multi-modal transport app?” asks the Leeds City Council Chief Digital and Information Officer.

“The current IT market is still a bit in the old world, and that is where they look to try and do everything themselves, whereas in the new world – this is my opinion now – it’s impossible for one single vendor to do everything, they need to open up a lot more.

“If you look at companies like Microsoft, the super companies of the past which try to provide everything, even they realise now that they have to open up and be a bit more platform-agnostic.”

He’s responded to this problem by working with IT professional bodies to disrupt the market and create more open, dynamic, and standards-based systems to benefit the public.

The council also invites tech companies to test their ideas through his ‘city as a platform’ concept. They can then collaborate with the Leeds digital sector to understand the local issues and then scale up their products to sell across the UK.

Read next: Leeds City Council Chief Digital and Information Officer Dylan Roberts interview – Developing ‘city as a platform’

Royal Brompton & Harefield NHS Foundation Trust CIO Joanna Smith avoids investing in developing in-house IT services that third-party vendors can do better.

Smith’s digital transformation strategy focused on a journey to the cloud that was guided by a thorough market assessment.

Her team spoke to a number of vendors and sought the advice of Gartner, who recommended approaching Microsoft and UKCloud. Between them, Smith says that “they came in at 10 to 20 times cheaper than the other vendors”.

Read next: Royal Brompton & Harefield NHS Foundation Trust CIO Joanna Smith describes the organisation’s cloud-first transformation

Eddie Stobart Logistics CIO John Court works with a broad spectrum of vendors, from the established tech titans to smaller companies that can help develop market differentiation.

“We work with a range of vendors from some of the major IT provider giants, such as BT and, for hardware and related services, IBM, through to highly specialised providers who are market-leaders in their field such as Quintiq, a world leader in optimisation software,” he says.

“The work we’re doing with them is to look at our overall supply chain network and model it and look at how we can make it even more efficient, by driving further efficiencies into the network.”

Eddie Stobart also invests in external vendors that can add value to the business, such as the e-commerce company iForce.

“One of the reasons that we acquired that business was that its technology was market leading,” says Court. “It was a great platform for further growth and to extend our overall e-commerce offering.”

Salford Royal Group Director of Digital Rachel Dunscombe works with companies of all sizes to tackle business problems in effective and innovative ways.

The strong vendor relationships she has established are crucial to creating digital services that benefit patients.

“In order to achieve our goals for healthcare we have truly partnered with a number of vendors big and small,” says Dunscombe.

“What has been important, regardless of size or geography, is an understanding of each other’s business, mutual respect, a building of trust and creating something new together that benefit both parties. My job has been to carefully choose partners based on their values and behaviours.”

Read next: CIO as an ambassador and Babel fish – Salford Royal Group Director of Digital Rachel Dunscombe CIO 100 interview

Global Radio Director of Technology & Operations David Henderson believes that signing extended outsourcing deals with big IT vendors is no longer a viable strategy.

Instead, he focuses on developing mutually beneficial partnerships with key strategic partners and working with a handful of smaller, innovative technology companies.

“The whole supplier management thing is quite interesting because the days of the 10-year outsourcing deal are long gone,” he says. “We do very little outsourcing here; we’re trying to go much more deep into partnerships, risk-reward models where we share some of the gain.

“In a way you’ve got these shorter term, more ephemeral relationships that need to be deeper so there’s some real paradoxes in how you manage that because you’re not managing a five-year outsourcing deal anymore. Very few CIOs in the media space are signing those deals.”

Read next: Global Radio Director of Technology & Operations David Henderson interview – Putting the team at the heart of smooth technology transformation

Yodel CIO Adam Gerrard has distilled his suppliers down to “a core of five or six partners” who are willing to collaborate, form partnerships and help add value to the company’s customers.

Gerrard takes a multi-vendor approach that encompasses both big vendors and smaller companies. He sells startups to Yodel’s executive leadership by emphasising that failures are inevitable on the road to success.

“You should allow people to fail, and continuously fail, because they might actually come up with an absolute gem,” he says.

His strategy for the cloud is to work with different vendors to find the right service for specific needs.

“We are already building links to two or three different cloud vendors, and we’re looking at broker services and how we can best be able to expand out as and when we need to.”

Read next: Yodel CIO Adam Gerrard interview – Delivering transformation and ensuring EU GDPR compliance

AstraZeneca CIO David Smoley has consolidated the pharmaceutical giant’s key technology and IT partners, which has helped solve real business problems by understanding customer needs.

“We went through all of our procurement contracts, all the agreements we had with software and hardware vendors and service providers,” says Smoley.

“It wasn’t about cost-cutting, it was about prioritising relationships which were strategic, dynamic and helpful as opposed to others that were pure buy-and-sell, or kind of walk-away relationships.

“I think there are a number of companies that we work well with and I think at this point most of the successful companies are coming around and getting on board.

“Then emphasising those partnerships, which led to more creative thinking, to more creative and innovative solutions.”

He also works with startups to add innovation to the company.

“We are really trying to tap into the startup community,” he says. “We are working with many companies that didn’t exist five years ago, who typically have developed their products with only cloud, mobile and usability in mind.”

Read next: AstraZeneca CIO David Smoley interview – From transformation to innovation agenda