Duncan Jones, Vice President, Principal Analyst, Sourcing & Vendor Management, Forrester speaks about how to make good choices between alternative solution providers and get the best results from implementation.
What is the correct definition of partnership between a technology vendor and the enterprise customer?
CIOs should work differently with a technology supplier or vendor (providing goods or services) as an important partner who might not be the top supplier you want to work with. They might deem themselves as an important customer to that supplier. But for the software companies they might not be their current customer in terms of new deployments - though they pay the maintenance fees.
CIOs need to differentiate between suppliers as you might not expand the relationship in future with the current supplier. You need to identify the best suppliers be it - software companies or service providers or multi tech companies like HP or IBM. Not only in terms of delivery of quality because everyone suffices that aspect.
What are the checks and balances for CIOs to strengthen relationship with vendor companies?
CIOs should basically look for four qualities of their supplier. Trust which is the foundation of good relationship between supplier and customers built over the years. Innovation by the tech vendor to leap ahead of competition. Customer centricity of the supplier in the way it reacts to the customer issues. And lastly to be recognised as 'best customer' by the supplier.
CIOs usually pick the supplier on lowest price or best products in the market. But they need to identify strong suppliers (who can transform their business and enhance technology) and reward the partnership with more business. This also helps CIOs point out problem areas (if any) through regular meetings with supplier to make the partnership stronger.
Each tech provider pitching their own versions of cloud, big data etcetera doesn't make like any easier for CIOs?
That's right. They should first create a sourcing strategy like in the area of cloud, where alternative services are available. There is a danger of getting locked in to a particular provider and an underlying risk of increased subscription rates in future. A better sourcing strategy would engage with multiple cloud providers. If one supplier is not performing or increases the price, CIO can decrease that spend and increase the investments for the other supplier.
However for areas like HR application, it would make more sense to work with a single cloud provider. The selection of sole or multiple sourcing vendors depends on the space and it depends on the customer.
Opex is a given for most enterprises. What pitfalls should the organisations avoid while selecting the sourcing vendor?
Many technology providers to the likes of Microsoft, Adobe and even SAP prefer subscription model for more predictable revenue. Opex is the direction that most vendors want the organisations to opt for now and in future.
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