Interop: CIOs Must Bond With Vendor CEOs - InformationWeek

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Interop: CIOs Must Bond With Vendor CEOs

Executive-level links are crucial when a contract is on the line or if business conditions drastically change, a former top CIO says.

In the late 2000's, Delphi was in Chapter 11 and shuttering plants across the country, and former CIO Bette Walker was under extreme pressure to cut IT costs, mostly from the auto parts supplier's major outsourcing contracts.

Having already won reductions from service providers EDS, CSC, and Hewlett-Packard, Walker had to go back for more. So she picked up the phone and called HP CEO Mark Hurd, CSC chief Mike Laphen, and top execs at EDS, which was acquired by HP in 2008.

"You've given me your last ounce of blood, now I want some more," said Walker, recounting the story Monday at the Interop Las Vegas 2010 Business Technology Conference and Expo, which runs April 25 to April 29 at the Mandalay Bay Convention Center.

The upshot: she was able to wring an additional 27% in cost reductions from her service providers, despite the fact they too were dealing with a slowing economy.

Walker managed the feat because of time she previously invested cultivating personal connections with the leaders of her top service providers. "I got it done because of those relationships," she said, during a session titled Competitive Vendor Relations In Tomorrow's Market, at Interop's CIO Boot Camp.

Walker's larger point was that CIOs need to stop thinking of outsourcers and other technology vendors as adversaries. They also need to understand what pressures and constraints their supplies are under to forge relationships that work for both parties.

The latter can be accomplished in part simply by reading vendors' financial reports and listening to their analyst calls, Walker said.

"Suppliers are not your enemy," said Walker. "These people are important to you. Many of them are much smarter than you are in some areas. They have something to give you," she added.

Walker said also that CIOs could do a better job managing service providers by acting not as "mechanics," but as "leaders."

Mechanics, Walker said, focus on writing RFPs and RFIs and defining solutions—often to the point of putting outsourcers in a box that doesn't allow them to bring their expertise and creativity to the table.

Leaders, on the other hand, provide vendors with a project's business requirements, and then oversee multi-service provider discovery sessions to flesh out details and best approaches.

"Traditionally we have had an antagonistic relationship with our service providers, as though they are some sort of subterranean life form" said the former CIO. "I don't respect that," said Walker, who now runs her own consulting business.

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