As you’re strategizing for new business, your staff is probably gathering data, pulling together sales materials, and practicing delivering their pitches to CIOs. But they—and you—may be missing out on the bigger picture. What CIOs want from vendors goes beyond the specifics of what you’re selling.
Based on the insight we have compiled on tech executives, they’re looking at five overarching issues:
1. It’s about US, not about You.
CIGNA Corporation CIO Mark Boxer says that with the days of selling generic products and services having gone by the wayside and replaced by solutions, “The companies that do the best with our team are the ones that understand our business, know the competitive landscape, can articulate our strategy and then orient around those solutions that best help us advance our technology strategy and, more importantly, our business strategy.” Being price competitive is important, but that’s only part of the value proposition, he says. It’s about total value delivered.
Boxer is looking for companies that can “come and talk about how we can grow our retail capabilities, how we can create a more personalized customer experience, how we can use analytics to make people healthier, as opposed to, ‘We have this tool kit; what do you think about our tool kit?’ or, ‘We have this technology; what do you think about this technology?’”
2. It’s not just about price and products. It’s about partnership.
When you’re an IT vendor with Jeff Kubacki, CIO at Alliant Techsystems, he says you’re part of his IT organization and, “together we’re going to deliver world class IT service for our company.” He adds that at his annual partner day for his IT vendors, “We go through the account plans, our conditions of satisfaction, how you’re going to be rated at the end of the year, and those types of things. The vendors love it...[because they] hear clearly what our objectives are and how they’re going to be measured.”
For Diane Schwarz at Textron, the solution’s pure functionality contributes to perhaps 40 percent of the decision. Schwarz says that finding out the goals of the stakeholders in the transaction can provide some great insight into whether the vendor would be collaborative and looking for win-win solutions. This is in contrast to a vendor just trying to hit their sales goals for new business or farming their existing customers for more products and services without an expectation to collaborate. During a meeting, she observes the body language and listens carefully to how a vendor presents information for clues about transparency. “Know thy supplier,” she says, adding that building a partnership is especially critical since technology is constantly evolving and advancing.
Rick Hopfer of Molina Healthcare says that with technology constantly evolving and advancing, “CIOs like me need strong partnerships with technology providers—whether infrastructure, applications or services providers—to rapidly evolve and securely extend to our employees and customers the technologies they need to do quality work, efficiently.”
3. Be transparent about interoperability, especially if you’re working with healthcare, financial services, and utility organizations.
Not surprisingly, this is a big deal to CIOs, but how well do you and your business respond to it? ACE Group CIO Kevin Shearan was compelled to write in CIO Review that there’s an ongoing struggle. He recognizes that large vendors want to “pander to open” but “gain massive value from parochialism.” He notes that while that has made Apple and Oracle historically successful, “This does nothing to help the enterprise CIO.”
Dr. Luis Taveras of Barnabas Health addressed the interoperability challenges faced by health care organizations. “In order for systems to be interoperable, they must be able to exchange data and present it so that it can be understood by any user. The problem is vendors have little incentive for enabling the sharing of information across vendor boundaries, which forces hospitals to overcommit to a single EHR system. “When will we really have the market capability for interoperability to happen?” Taveras asked. “Or will we have to wait for the government to make it happen? We have to take it on our own for that to happen. Different solutions have to come together to fight specific problems, one by one.”
For Bank of America, interoperability is also crucial. By 2018, the company plans to have 80 percent of its workloads running on software-defined infrastructure pioneered by companies such as Facebook, Microsoft and Amazon. In addition to huge cost savings benefits, the company hopes to eliminate the compatibility issues posed by traditional vendors as well as be able to innovate around new services and applications faster. “I worry that some of the partners that we work closely with won’t be able to make this journey,” said David Reilly, BofA’s Technology Infrastructure Executive, referring to the prospect that some of its current vendors won’t get a piece of the bank’s new IT investments.
4. How can you help us innovate?
IT has to drive innovation while still meeting the business’s general technical support. For Intuit’s Atticus Tysen, the big issue is around, “how do we get more efficient and automate with what we already have, working with vendors to help us get better while we shift resources over to the new, because I’m definitely not getting more budget!”
At Neiman Marcus, the IT department has invested a lot of time on technology innovation and the willingness to consider unconventional alternatives is embedded in the retailer’s approach to technology. CEO and President Karen Katz explains, “While we still rely heavily on the large, important technology vendors, we spend a lot more time than we did a few years ago working with startups or small companies, because they are able to bring change into the organization more quickly. Also, in areas where historically we would do it ourselves, we are increasingly building partnerships so that we can be more nimble, so that we can scale and bring more innovation into the company.”
In banking, executives are seeking vendors with a record of innovation and strong outreach programs with customers, according to Comerica’s CIO Paul Obermeyer. He said in an interview that his bank is trying to do a better job of “capturing that innovation” by taking better advantage of packages vendors have to offer and upgrading systems more on an on-going basis than previously.
5. Vendors must have skin in the game.
CIOs are adamant that vendor partners get it when it comes to technology economics analysis, says BofA’s Reilly. The ones who don’t seem to get it are those with inflexible revenue models. “Our partners are such an important part of our expense base, so driving this thought process with them is an important part of the strategy,” he says. “The vendors that do understand Bank of America’s strategy realize this is an inevitable trend. ... It is becoming less viable for us to look at an individual technology or contract on its own.”
BofA CTO Cathy Bessant wants tech contracts whose costs scale down as well as up and expect tech vendors to share the bank’s risk and regulatory posture, including in some cases agreeing to contracts that make clear they share in the liability if their technology causes problems that lead to losses or fines for the bank. Reilly adds that vendors must “understand the bank is driving down technology expenses now and forever. If you’re open, have contracts that flex up and down, and align with the bank’s risk culture, ’you’ll grow your share. Not all our partners will make that cut.”
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