What CIOs Want From IT Vendors - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
IT Leadership // CIO Insights & Innovation
Commentary
1/28/2009
09:39 AM
Bob Evans
Bob Evans
Commentary
50%
50%

What CIOs Want From IT Vendors

In hard times like these, businesses are looking to slash costs -- so should CIOs beat on their vendors relentlessly for price cuts? It's a tempting short-term alternative, but it's probably not the right strategy. The next wave of leaders among IT vendors will be those that offer innovative programs to share some of the current risk in return for a bigger slice of future rewards.

In hard times like these, businesses are looking to slash costs -- so should CIOs beat on their vendors relentlessly for price cuts? It's a tempting short-term alternative, but it's probably not the right strategy. The next wave of leaders among IT vendors will be those that offer innovative programs to share some of the current risk in return for a bigger slice of future rewards.It's the only way that's going to work beyond the very short term, and two recent examples point the way. On the vendor side, Oracle president Charles Phillips recently told InformationWeek that good products and healthy vendor/partners in it for the long haul demand healthy margins.

On the CIO side, Kent Kushar of winemaker E.&J. Gallo has developed a 12-point model for rating vendors called SUMnership -- the sum of all parts of a partnership -- that analyzes six qualities for the vendor company, and six specific characteristics for its products. Kushar told my colleague Andrew Conry-Murray that too many CIOs are looking to dominate their vendors.

"That strategy doesn't work," Kushar says. Rather, he values relationships where vendors act as partners. "We share our strategy with vendors, show them what we're doing, and ask for their help."

As Conry-Murray notes in an excellent package on vendor/customer relationships, Kushar and his team analyze vendor companies for leadership, strategy, integrity, relationship, work location, and talent; and analyze products for functionality, service level, ease of use, price, perceived value, and experience.

The vendor position expressed by Phillips has merit as well, and is embraced by Oracle rival SAP as well, according to an excellent piece on software pricing models by InformationWeek's Mary Hayes:

Bill McDermott, president of global field operations at SAP, makes no apologies for SAP's decision, announced in July, to replace its two levels of support offerings with just one premium support offering, called Enterprise Support, with an annual price of 22% of the software license. "The real criticism you can make is, 'Gee, Bill, why did it take you guys so long to increase the cost of customer support, because you were five points below the industry benchmark of 22% all that time and giving up shareholder value?'" McDermott says. "That's a fair criticism I'll accept with open arms."

I think there's a lot of middle ground to be explored by leading vendors like SAP and Oracle, and that's why I've written an open letter to Oracle CEO Larry Ellison with some suggestions. Take a look and let us know what you think.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Slideshows
IT Careers: Top 10 US Cities for Tech Jobs
Cynthia Harvey, Freelance Journalist, InformationWeek,  1/14/2020
Commentary
Predictions for Cloud Computing in 2020
James Kobielus, Research Director, Futurum,  1/9/2020
News
What's Next: AI and Data Trends for 2020 and Beyond
Jessica Davis, Senior Editor, Enterprise Apps,  12/30/2019
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Slideshows
Flash Poll