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From IT vendor management to strategic partnerships

Brendan McGowan | June 2, 2016
According to the 2016 Strategic Partner Index Survey (produced by the CIO Executive Council and IDC), IT buyers and vendors need to forge relationships of trust and collaboration. Failure to partner puts both groups in peril.

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The SPI’s communication category, with an average yes-response percentage of 67 percent across five distinct criteria, reveals both candor and comfort with vendors. There is, however, one glaring outlier that could imperil strategic partner relationships in the long run.

Three-quarters (75 percent) of IT leaders report that their strategic partners are honest about the mistakes they make (see Figure 5). Additionally, and significantly, roughly the same percentage (74 percent) feel more comfortable sharing information about goals, challenges, and strategy with their strategic partner than one year ago.

Nonetheless, it is clear that IT leaders feel that the conversation is ultimately one-sided thanks to a statistical outlier: A minority (46 percent) of IT leaders share that their most strategic partners regularly demonstrate roadmap alignment, a two-digit-margin drop relative to all other criteria. Candor and continuity are evident on the part of strategic partners, but demonstrated congruence — of interests, roadmaps, and strategy — is an evident gap.

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In the SPI’s flexible pricing and shared risk and reward category, some of the biggest opportunities for vendors reveal themselves — but vendors may, in turn, be hampered by data-deficient buyers. For example, only two out of five (40 percent) IT leaders state their strategic partners are open to agreements featuring significant outcome-based pricing or payment by results — and a full 21 percent say that this criterion is not applicable as a general rule (see Figure 6). This data indicates that vendors are ill-equipped to deal with such requests, and also that many buyers do not have the data at their disposal to manage such potential risk — a concern for vendors and buyers alike.

Openness to more minor changes is far more common among strategic partners: A full three out of five (62 percent) strategic partners, for example, are willing to adjust the scope of work without always referring to the contract.

Finally, nearly half (45 percent) of strategic partners are willing to cannibalize their own revenue to offer new, cheaper or faster solutions — a reflection of an ever more diversified, agile, and competitive market.

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Across the SPI, the criteria category that received the highest average percentage of “yes” responses was the responsiveness category, with a mean “yes” response rate of 75 percent across criteria (see Figure 7).

The individual criterion that is most prevalent across strategic partners is also found in this same category: “They provide centralized account management,” at 83 percent, is the most common partnering behavior in the entire Strategic Partner Index.

 

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