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CIOs and Software Vendors - The Thin Line Between Love and Hate

Aug 30, 2010
By

Drew Robb






Some love a few of them. Many hate a whole lot of them. And some that used to love just one now detest them (or vice versa). Yes, it is a thin line between love and hate when it comes to the CIO and the software vendors they depend on.

One possible approach is to give each vendor a chance, lay the ground rules and then only deal with those that play the game. Gary Acromite, CIO at Gavilon Group, tries to do this in his dealings with software vendors -- he calls it "optimistic partnering".

He views all suppliers with optimism, takes all their calls and treats them with professionalism and respect; albeit briefly when their product and/or services are not immediately applicable or relevant. Part of his logic is this: opening up a dialog to give them an opportunity to explain their product or service gives him market insight.


“As more and more basic IT functions are delivered externally, suppliers become an extension of IT,” he said. “My overall initial expectation is to communicate their strategic role/responsibility within my operational model and work collaboratively to achieve the goals.”

But not all suppliers get it. Those that do (and the ones he likes) assume accountability for their actions, have a great deal of integrity, measure performance, strive for future optimization, allow him to influence their strategic direction and charge a competitive fee. This also manifests in such ways as making things right at their expense if they make a mistake.

As for the suppliers that don't get it, Acromite believes they all have a similar makeup: rigid interpretation of their agreements; focus on the sale and not on delivery; blame others or making excuses for poor performance; performance not matching rhetoric; and not interested in exploring a strategic relationship. "Arrogance seems to be a common personality trait in them as well."

 

Overcoming frustration

Al [he asked that his company and last name not be used], the CIO of a California-based multinational is frustrated by vendors not listening and failing to craft a deal that is a win-win. He considers that a win-lose. From either perspective, it is bad business if the customer presses so hard there is no profit for the software vendor, or alternatively, if the software vendor doesn't take enough care to find out what is really needed rather than making a sale.

“The best vendor relationships are where they really deliver over and above what was expected at a fair price and yet the vendor can still make a profit,” said Al.

There are several factors he mentions when it comes to the suppliers he dislikes. There are those that just plain don't follow through. They make promises, close the deal and then fail to deliver. When they lose credibility, they typically fall back on the service level agreement (SLA) and then shrug their shoulders.

“What vendors often fail to grasp is the value of forming such a strong partnership that the customer’s word of mouth is excellent,” said Al. “They love telling others about that particular vendor.”

But wanting strong relationships is one thing. How do you forge those bonds when folks like Al are not open to cold calls? He won’t answer a call from a stranger. But if he met someone before or requested information, he responds. Unsolicited email is given the same attention as general spam.

While shutting most potential suitors out has largely become a necessity, he expresses a hint of sadness about the existing state of affairs. He craves mutually beneficial relationships but the realities of the marketplace have left him reluctant to let new sales reps in the door.

“Once I have established a relationship with a vendor that is credible, I will swear by their salesperson or support executive,” said Al. “But once burned or they don't deliver what was promised, that bridge is burned for a very long time. And a competitor is always around the corner to take their place.”

But it would not be wise for the CIO to avoid any and all cold calls or stay too focused on a few trusted vendors.

"The CIO has to have a vision of where IT is going in the near term and in the future and figure out who is going to help get the organization there," said Greg Schulz, an analyst with StorageIO Group. "That requires a balance of those established companies currently being worked with, and a sprinkling of niche players and up-and-comers to keep established vendors on their toes.

That permits the CIO to stay open to new developments that the big suppliers may be slow to adopt, However, staying open to new ideas and maintaining additional vendor relationships comes at a cost. Schulz suggestion is to allocate a certain amount of time to manage these relationships in order to stay in control.

Vendor perspective

Chip Nickolett, geographic lead for the Americas at open source database provider Ingres, spent years as a consultant where he gained plenty of insight into what CIOs will respond to. This has served him well. He thinks CIOs typically respond to vendors based on value added by the relationship (company, products, and services); how well they are treated; and how important those products are to the customer.

“A vendor who goes out of their way to help a customer innovate and save money quickly becomes more valuable for that customer” said Nickolett. “Your products may not have the biggest footprint in their organization, but if they see you truly looking out for their best interests (instead of just your own) the relationship will strengthen.”

As an open source provider, he said that relationships become especially important. With no up-front license fees and a lack of multi-year agreements, customer scrutiny is an annual event -- one slip and the business isn’t renewed.

“This raises the bar for everything we do,” said Nickolett.

Now that he’s on the other side of the cold call line, he has found that most companies don't object to cold calling in general. What they object to is people who waste their time or are rude to them or their staff.

“If you have a compelling message and can deliver it quickly then they will usually give you a minute or two to hear you out, and if they're interested they will allow you to schedule a follow-up call,” said Nickolett.

His list of vendors no-no’s includes: calling and not leaving messages or misrepresentation; not spending a few minutes to learn about and have a basic understanding of the company that they're calling; or just not communicating well. Unfortunately, he said, the worse the cold caller, the more persistent they tend to be.

“Vendors can cause upset and frustration when they don't listen, sell what they want instead of what you need, are rude or disrespectful, or don't deliver on promises,” said Nickolett. “Do things right and most people don't mind the unsolicited call or email.”

Drew Robb is a freelance writer based in Los Angeles specializing in technology and engineering. He has a degree in Geology/Geography from the University of Strathclyde in Scotland. He is the author of Server Disk Management in a Windows Environment, as well as hundreds of magazine articles.


Tags: CIO, Vendor management, software vendors, win-win, win-lose,
 

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