We had a pretty good idea recently (or so we thought) to look at the relationship between CIOs and their strategic vendor partners. The idea was to take a different perspective — ask the vendors for best practices and for not-so-great practices — hoping for examples that could be used to guide CIOs. So we made a list of likely strategic vendors for CIOs — the likes of HP, IBM, Microsoft, Oracle, and SAP — and pushed a request out to multiple vendor analyst relations contacts.
It turned out, however, that this was akin to inviting them to visit the dentist and have their teeth drilled. Phrases like “we don’t understand the request,” “we don’t feel this is an appropriate fit for us,” and “actually, we just can’t find anyone to talk about this” threaded through the back and forth push-pull. After several months, we succeeded in getting one interview. The best practice uncovered: call up the vendor outside of regular check-ins, and be involved in the contract negotiation. Worst practice: delegate to staff or procurement. Not exactly the insightful examples we were hoping for.
Hmm. Generally speaking, vendors (including senior execs) love to talk to Forrester, seeing it as an opportunity to be quoted, tap a wealth of experience in a topic, provide their practices as best practices, and be cited in the interview list for research. So what’s behind the apparent reluctance to discuss this particular topic in any depth? Several theories (your feedback welcome):
Vendor executive management seldom talks with CIOs. Our one interviewee recommended a strong personal relationship between vendor execs and the CIOs, anecdotally correlating the strength of the relationship with more strategic use of the vendor — even helping to problem solve in tough times. But many IT execs delegate the relationship to team members. In those cases, the reality may be that the CIO only surfaces in later rounds of contract renewals — to remind the sales rep (not top management) who is the customer and who is the vendor. The nature of the relationship is further complicated by the type of IT organization a CIO manages. See Forrester’s report “How CIOs Evaluate Vendors.”
Vendors are afraid of alienating CIOs in a down economy. This is certainly plausible — even generalized critiques can be misinterpreted in such a bad year. As IT budget growth crawled to its nominal 1.3% growth rate in 2009 vendors have taken it on the chin. With every CIO considering or done with consolidation into shared services, license and maintenance revenue for everything from services to backup software is a candidate for shrinkage.
- IT is irrelevant — vendor management is the face of the relationship. Forrester has seen the vendor management function in IT procurement play a bigger role over the past several years. It is possible that vendor execs and CIO paths will be crossing less and less, making any advice meaningless.
Regardless of the cause, the take-away here seems to be that CIOs are in the driver’s seat — big time! We still believe that engaging regularly with your strategic vendors creates a win-win scenario. But don’t expect your vendors to be proactive or identify executives for you to interact with on a regular basis. Instead, decide what works for you, and dictate that to your key partners. Over the coming months, we’ll be tapping CIOs like you to uncover best practices that work. If you have some, chime in and join the conversation.
By Sharyn Leaver