by CIO Executive Council

CIOs reveal how they get value from vendor partnerships

Jul 30, 2015
CIOIT Strategy

CIOs and vendors enjoy mutual benefits when they're in step with each other

Here’s a look at how three CIOs are working with their vendor partners to build relationships that benefit both parties.

Caroline Faulkner, Pramerica Systems Ireland Emphasize Trust, Transparency, Respect

We work with many vendor partners for both high-end projects and team augmentation. These partnerships help us ramp up resources when we need them, gain long-term expertise at a lower cost, and access global talent.

Our approach to vendor partnerships is based on trust, mutual understanding and respect. Both parties need to feel there’s something in it for them. What we get is access to talent worldwide that we can source during busy times or when we have a need for hard-to-find skills. The vendor gets a financial benefit, a good partnership and interesting work. And we both benefit from a greater certainty that our relationship can evolve strategically.

It’s important to be honest and transparent and to have robust conversations about truly understanding what’s going well and what’s not. That’s why we recently created a global enablement office. This function consolidates best practices in vendor management to educate and track not just how our vendors are doing, but also how we’re doing. This group has quarterly reviews with our vendors, and we meet face to face in each other’s facilities. In the end, it’s all about holding each other mutually accountable for the work.

Thomas Phillips, Elavon Look For Mutual Benefits

In financial services, we spend an increasing amount of overhead managing third parties, and when we can forge close partnerships, it minimizes that overhead. It takes a lot of investment to build those kinds of relationships; it’s not as simple as just declaring them a strategic partner.

We look for strong vendor relationships on two fronts: strategic functions where we’re interested in growing our capabilities, and IT management areas where we can benefit from a broader view of the market.

In any vendor-client relationship, we’re naturally in the position of power. But a strategic partnership has to be mutually beneficial. They need to get something out of it, like visibility into our business, that makes it easier to identify new opportunities.

Relationship management is very important. Tools like scorecards that provide an overview of the relationship, along with quarterly reviews with senior management, help maintain alignment. If it’s going well, strategic partners will be banging at your door to participate in executive reviews, site visits, customer advisory councils and peeks into their product pipelines.

Sometimes partnerships don’t work, like when the vendor is more focused on sales than on relationship management. Occasionally, a company’s products are no longer competitive; they need to continually provide superior products and value.

Eric J. Brown, NCI Building systems Strive For Long-Term Relationships

I love when a vendor can become my trusted adviser, where there’s a mutual understanding of their products, my business, and how to fit the two together. We had one infrastructure provider where the same person handled our account from day one. She knew our business, discussed new opportunities and made us aware of any new pricing discounts and licensing updates. That’s the type of proactive engagement you want.

But that’s not the norm, particularly with software vendors. Account managers change frequently, and there are often different account reps for each product suite. The lack of consistency makes it difficult for me to trust that they know their own products and licensing rules, let alone my business. There’s never a conversation to say, “We have this new functionality or update.” You have to call them to see if there’s a solution for your problem.

I have analysts who are experts on our business and also keep up with all the new vendor offerings. We know everything about the products we’ve purchased–the complex licensing schemes, the functionality, what’s turned on and what’s turned off. I hope someday we can look to our vendors for that. But for now, we’ve had to develop our own internal expertise.