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Thu, May 10, 2007 10:39 EDT
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Posted by: Laurianne McLaughlin in Best Practices Topic: Enterprise ManagementBlog: Inside Tech
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Mid-market CIOs often feel like they’re not receiving full attention from their vendors. After all, the big guys have more money to spend and more staff to help manage vendor relationships. This means if you're a mid-market CIO, you need to get a bit crafty. At our recent leadership conference, some CIOs shared their strategies.
Check them out --and please, add your own tips and tricks. I’ll also share the best advice in an upcoming print article.
By the way, several midmarket CIOs told me at the leadership conference that they’ve yet to feel the love that some of the biggest name vendors, including SAP and Oracle, are proclaiming for them at the moment. These vendors are making big marketing pushes for midmarket customers -- now that they’ve won over as many Fortune 1000 companies as possible. But from the midmarket customer point-of-view, it’s still at the stage of talk, not walk. It’ll be interesting to see how that changes by late this year, given the expected debut of new SAP on-demand services for midmarket companies in the fall. Now onto the tips:
1. Share your business plan. “I am very much into collaboration and find sharing your future business plans often helps the vendor understand just what is at stake,” says Sandy Rasel, Vice President, Global Process and Applications Management, McCormick and Company. “If you share your plans, you are able to have a much richer dialogue that supports your future direction and engages the vendor to work with you.”
2. When negotiating, Google first. You’ll be amazed what you can find when you search on a particular hardware part number or software package, says a mid-market CIO who uses this tactic repeatedly, most recently when purchasing a WAN acceleration device and some high-end analysis software. (He prefers his vendors don’t know he’s hip to this trick, so we agreed not to share his name.) “You will be surprised how many people scan invoices or leave price data online,” he says. This should help you determine reasonable discounts.
3. Whet the vendor’s appetite. Hint at potential growth within your parent company organization if the price is right and the product is excellent, says Jeremy Schnorbus, director of technology services for NERA Economic Consulting.
4. Be the early bird who
It seems that mid-market CIOs are more frustrated than ever with large software vendors. During a discussion between mid-market CIOs at a recent CIO conference, nearly all shared very negative experiences. Dramatic, last minute changes in pricing models, little or no response to problems, and often "dead-air" on the "other end of line" when attempting to contact the vendor about problems typify the complaints. More so than ever, these CIOs are feeling held hostage by and with little or no leverage over their software suppliers. Some CIOs resolve this by taking advantage of their service provider's association with the large software vendors; often they have better relationships with software suppliers because of their partnerships (i.e., MS Gold Partner, etc.) and avenues for communication not available to many CIOs. Often this approach works; however, just as often it falls far short. What to do? For those of us caught in the middle, maybe its time to try a different strategy.
There are a number of software organizations positioned to offer alternatives to the usual suspects list of large vendors. Most notable among them may be Google. Google Apps provides an ever expanding offering list that includes email, IM, word processing, spreadsheets, calendar, ten gigs/user of storage (I couldn't afford 100 meg/user from my last outsourced vendor), collaboration, and web publishing -- all at fifty buck a user a year. Combine that with extensible APIs to integrate with 3d party systems, administrative controls to manage your domain, soon to be released exportable email, 24/7 support, and three nines of reliability, and all of a sudden you have a pretty interesting proposition for a mid-market enterprise office app suite. Does it sound too good to be true? Is it too inflexible or risky? I don't know the answer to those questions and I'm certainly not advocating a Google world. But, riddle me this batman: What if droves of CIOs in a unified front approached Google with a list of clear requirements that would allay our fears of Google Apps? What if Google responded by building in added capabilities to meet our requirements? That just might change the entire dynamic of our relationships with some of our software suppliers. Google type alternatives such as this might not solve all our woes but they would certainly give us an alternative to dangle in front of a particularly difficult sales account manager and help us tilt the balance of power more in our favor. I can see myself walking into a negotiation singing the software version of a Johnny Paycheck classic...
So, those are just some ruminations about empowering the mid-market CIO through the lever of competition. If other CIOs want to band together to give it a try, I'm all for leading the charge to Mountain View (or wherever). If not, I'll go back to my email client and turn up Johnny Paycheck.
Interesting article, and I offer a couple of points. We should all be researching our key purchases especially if we feel that we are being taken advantage of, and this goes without saying.
If you are not getting a vendor's respect, then you are dealing with the wrong vendor, or too big of a vendor.
Thirdly, and most important, is that Google apparently stores all email messages (and I believe searches, as well) on their databases for future use.
Would you want to use an internet service or software Company that stores your private data for their own use, or others?
Just food for thought...
Vendors like accounts to be references for future sales. It is amazing how much extra support and care you get from vendors when you offer this upfront. I also volunteer to speak at their annual conferences on the success of a project using their technology. This might even get you free resources.