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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.

Ultimately, the responsiveness category of the SPI reflects table-stakes behaviors (e.g., comfort with tough conversations and consistent delivery) that are both prevalent and vital.

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Thirty-eight percent of IT leaders indicate that their most strategic partners provide cloud and/or infrastructure-related solutions (see Figure 8). There is no question that Infrastructure-as-a-Service (IaaS) is becoming more integral to more enterprises every year. According to a separate IDC CloudView study, 41 percent of US firms are currently using IaaS, 25 percent have firm plans to implement in 12 months, and 23 percent are evaluating.

According to the SPI, security, ERP, and network functionality represent some of the most widespread functionalities offered by strategic partners, respectively. This is not surprising: CIOs still need to keep the lights on. Analytics and mobility are also on the tactical short list, fulfilling basic business requirements. At the same time, social and CRM capabilities, which often grab the headlines, are not as prevalent among strategic partner offerings - only a marginal percentage of vendors offering these capabilities are seen as the most strategic.

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One-third (34 percent) of IT leaders report they are not satisfied, or are marginally satisfied, with their most strategic vendors (see Figure 9). Even among the most strategic vendor relationships, there is often a demonstrable gap between expectation and perceived value — representing a risk for buyer and seller alike in the long run.

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For vendors, the ability to bypass the competitive bidding process is the hallmark of strategic partnership, saving both time and money. Constantly going through “job interviews” during the bidding process has real potential to distract embedded vendor teams from delivery on other projects.

More than one-quarter (27 percent) of IT leaders state that they never allow strategic vendors to bypass competitive bids (see Figure 10). Only seven percent of survey respondents were from the government and non-profit sector — the rest of the IT leaders surveyed are not compelled to conduct competitive bids due to legal mandate, or in the interest of satisfying public scrutiny. This data demonstrates, then, that a significant portion of commercial IT buyers still employ the competitive bidding process as a testing ground, and that they believe direct competition leads to efficiencies and innovation.

At the same time, almost two-thirds of IT leaders (64 percent) allow strategic vendors to bypass the competitive bid process sometimes. While realizing the value competition can drive, buyers are pragmatic about the involved costs and selection efforts. The choice to conduct competitive bids or not depends, then, on the type of service/solution in question; the buyer’s procurement and business needs; and, to a large degree, the buyer’s perception of whether an incumbent is still being strategic or not.


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