by Adam Dennison

CIOs are cutting back on the number of ‘strategic’ vendors they use

Jul 30, 2015
CIOIT Strategy

IT vendors need to learn more about CIO challenges and business goals if they want to achieve the exalted 'strategic partner' status.

How many truly strategic vendor partners do you have? What does it take for them to earn that status? While every enterprise tech vendor may strive for that elevated level of importance to your business, more often than not they fall short. What gives?

According to our 2015 CIO Role and Influence research survey, in the past four years large enterprises (those with more than 1,000 employees) have reduced the number of vendors they consider to be strategic partners from six to three, on average. Some of that drop may be due to industry consolidation or the wider use of cloud services and IT service providers. Some of it may be the result of vendors falling short of clients’ requirements.

What our research clearly shows is that these are the top three reasons vendors earn strategic partner status: top-notch customer service, an understanding of their customers’ business goals and objectives, and great post-sales support and service. What did our 1,249 survey respondents think about price and product features? Those didn’t even make the top 10.

But guess what most tech providers like to talk about when they’re face to face with CIOs? Product features. I know this from the time I spend with both communities at our many CIO events and other industry gatherings. All too often, I watch vendors dive in and start talking about product features and benefits before they’ve established credibility in understanding the customer’s market. Even worse, they forget to ask about a CIO’s specific business goals and challenges.

My advice to IT vendors is to listen more and talk less when meeting with CIOs. Ask open-ended questions about their companies. Inquire about the biggest competitors in their vertical industries. Find out what’s really on their minds. Then, when it’s your turn to contribute to the conversation, talk about how your team can help them meet their business goals. Mention some of your current clients and discuss what they’re doing with your products. Ask who makes the cut as a strategic partner–and why.

Some of the CIOs I know are actively reducing the overall number of major vendors they use in order to work with startups in markets for emerging technologies such as mobile, security and data management. What do you think the reasons are for these losses in strategic partner relationships? I’d love to hear from both my CIO and vendor friends on this, so drop me a note and share your thoughts.